5 Fascinating Facts about Scotland’s Oil

The commercial extraction of North Sea oil began on the shores of Scotland in 1851, when Scottish chemist James Young began mining the black stuff in Scotland’s Midland Valley. However, it wasn’t until the 1970s that North Sea oil became a political hot potato, when it was discovered offshore, bringing great wealth to the UK government.

So, without further ado, here are 5 fascinating facts about Scotland’s North Sea Oil reserves.

5.  There are approximately 15 - 24 million barrels of oil remaining

Despite wide-spread claims to the contrary, exploratory programs in the North Sea region have identified 11.4 billion barrels of oil remaining so far. Increased investment and investigation is likely to lead to further discoveries. Such investment is being pursued by the current UK government, who have promised to prioritise Scottish energy interests over the coming years.

The estimated ultimate recovery (EUR) of an oil well is the process of estimating how much cumulative oil can be mined from that particular well over the entire course of its lifespan. You can read all about EUR in this article: How to Estimate the Ultimate Recovery of an Oil Well.

4. The remaining oil reserves are worth in excess of a trillion pounds

Current valuations are based on projected markets, which suggest the remaining North Sea oil is worth approximately £1.5 trillion. As global oil reserves decline, oil prices will soar, encouraging many to argue in favour of investment in renewable energy sources. The expansion of the global economy has already resulted in higher oil prices: during the 1990s, oil was worth approximately $10 a barrel - last year, a single barrel of oil was likely to set you back $112.

3. North Sea oil is likely to last for several decades

While environmentalists may encourage us to shift our attention away from the North Sea and onto more renewable energy sources, North Sea oil reserves are unlikely to run out for several decades. The UK government, in particular, insists that oil has a future “well beyond 2055”, while energy expert Doctor Richard Pike predicts a further century of North Sea oil.

Commentators argue that the profits generated by North Sea oil over the coming decades should be invested in renewables. In this respect, North Sea oil may represent both an environmental challenge and an environmental opportunity.

2. Westminster have wasted North Sea oil profits

In the past, successive UK governments have wasted the income generated by North Sea oil and gas reserves. Neither Labour nor Conservative governments have managed to establish an “oil fund”, though both have conceded that this was a big mistake.

1. More than 90% of UK oil and gas revenue is generated in Scotland

The University of Aberdeen’s Dr Alex Camp observes that over 90% of the UK’s oil and gas revenue is generated in Scottish waters. Therefore, if Scotland had voted to leave the United Kingdom, the UK would have lost an important income stream permanently. Following the success of the “no” campaign, British Prime Minister David Cameron promised what he called a “devolution revolution”, yet Scotland is unlikely to be overseeing its own energy interests any time soon. During recent months, the Scottish referendum for independence has placed North Sea oil in the spotlight once again, with both “yes” and “no” campaigners debating its economic significance and its potential future. In the end, the “no” campaign triumphed, enabling UK energy manufacturers and investors to breathe a sigh of relief. Yet, while it’s unlikely that Scotland will come to govern its own energy sector entirely independently, some more gradual changes are probable. In this post, we asked: how will the Scottish “no” vote affect the UK energy sector?