North Sea output could increase sharply, with a happy mixture of rising investment, high prices, and tax incentives helping out.
Based on oil prices of $90/barrel, output could reach 1.4 million bpd by 2017, according to a research study by a University of Aberdeen team.
"Oil production should revive from recent levels for a period of several years, particularly with the higher-price scenario, where the increase could be substantial," the study by Alexander Kemp and Linda Stephen concluded.
Back in March, the British government had introduced tax breaks to lure companies into working in the North Sea area, where companies like BP (LON: BP) and Royal Dutch Shell (NYSE: RDS.A) operate. By 2015, the study said, UK natural gas output is projected to reach over 5 billion cubic feet per day.
Today, Britain is a far cry from being one of the world’s top ten oil producers as it was in the 1990s. In 1999, output was 2.9 million bpd, but oil prices were at $10/barrel.
Last year, average Brent crude hit $111/barrel, and this year it has been around $112.
The study does claim that production over the next three decades might not reach the government’s estimated 20 billion barrels of oil equivalent, staying at a more modest 16.8 billion. That’s assuming further development doesn’t happen.
However, despite field investment projected to be around 11.5 billion pounds in 2012 alone, spending overall may drop.