By a Newsnet reporter
The news that Aberdeen-based Faroe Petroleum has substantially increased its level of oil production over the course of the last year has been welcomed as the latest indication of the robust health of the sector.
In the first half of 2012, Faroe Petroleum produced 8,581 barrels of oil equivalent per day (boepd), compared to 1,263 boepd in the first half of 2011.
Revenue at the company in the first half of 2012 stood at £90.6 million, significantly up on the previous year’s figure of £40.1 million.
Since January 2009, Faroe Petroleum has drilled five exploration wells and has made three discoveries: the Glenlivet and Tornado gas discoveries and the Fulla oil discovery. The company has a part share in the drilling operation currently ongoing on the BP‐operated North Uist exploration prospect in the Shetland Basin, west of Shetland.
Reports in the 1970s that the oil would last just 30 years have proven unfounded. Most recent estimates claim that there are the equivalent of up to 24 billion barrels of oil remaining in the North Sea, which would achieve a higher value than the combined total of what has already been extracted to date. The oil and gas industry will continue to be an important factor in the Scottish economy for decades to come.
As oil extraction technologies continue to improve, the productive life of existing fields is extended. Recently BP announced a £90 million investment in new technology in the Clair Ridge field west of Shetland, which will allow the company to extract an additional 42 million barrels on top of the estimated 640 million barrels which could be recovered using older technologies.
New oil fields are still coming into production in Scottish waters, and oil companies are optimistic that there are other fields still to be found. Earlier this month the Scottish oil exploration firm Cairn Oil revealed plans to drill up to 15 new wells in the North Sea.
Commenting, SNP MSP Maureen Watt, who previously worked in the oil and gas industry, said:
“The increase in production that has been achieved by Faroe Petroleum is the latest positive indicator we have seen from the oil and gas industry in recent months.
“It is fair to say that the strong performance of the sector is one of the brightest spots in Scotland’s economy and is key to Aberdeen’s prosperity.
“The oil and gas industry will continue to be a major employer and economic success story for many years to come, but it is important that these resources are managed well for the long-term.
“It is imperative that instead of the Treasury continuing to squander the substantial revenues from the oil and gas industry, Scotland gains full responsibility for managing the industry off our coasts.
“With control over our own resources, we will be in a position to invest in an oil fund that has long been needed and ensure that Scotland benefits from the oil and gas sector in a sustainable way for generations to come.”