North Sea ‘has three times more oil and gas’ than Government claims

Britain’s North Sea could yield up to three times more oil and gas than the Government has suggested, leading analysts have found.

Wood Mackenzie, which monitors oil and gas fields around the world and is renowned as a global leader in energy data, estimated that there could be up to 14 billion barrels worth of recoverable oil and gas in existing North Sea fields.

That is more than three times larger than the four billion barrels estimated to remain in place by Ed Miliband’s offshore regulator, the North Sea Transition Authority (NSTA).

If accurate, Wood Mackenzie’s data suggests UK oil and gas reserves could cover the country’s entire fossil fuel demand during the planned transition to net zero by 2050.

In its AI-powered analysis, the company looked at “recovery rates” – meaning the proportion of oil and gas in a field that can actually be extracted. Data from North Sea fields were compared with 35,000 others around the world.

It said: “If UK fields were able to match recovery factors from analogous global fields, an additional 9pc could be recovered. If best-in-class recovery factors were matched, an additional 18pc of recovery could be added.

“These scenarios would potentially add seven and 14 billion barrels of additional production, respectively, over the lives of the 100 largest fields.”

The actual amounts could be even larger. The NSTA itself estimates that there could be an additional 15 billion barrels in unexplored areas outside of existing fields.

The UK’s offshore operators have extracted 47 billion barrels of oil from the North Sea, Irish Sea and Atlantic waters over the last five decades. Annual output peaked at about 243 million tonnes in 1999 but since then it has steadily declined, reaching 60 million tonnes last year.

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Government data suggests this will plummet to just 21 million tonnes a year by 2035. A slow, natural decline has been massively accelerated by the Government’s drilling restrictions and 78pc tax rate on offshore profits.

Greg Newman, chief executive of leading global oil traders Onyx Capital, said the North Sea had huge remaining potential – if politicians allowed.

He said: “The problem is not one of lacking oil reserves – rather, it is the politicisation of the extraction process.

“With the correct approach to tax policy, North Sea oil and gas could remain a key employer and source of tax revenue, but punitive taxation makes development of new projects unattractive.”

Claire Coutinho, the shadow energy secretary, said: “The Government should simply get out of the way and allow Britain to make the most of its natural resources – that means scrapping the windfall tax, ending Labour’s ban on new licences and backing the North Sea.”