Britain Expected to Remain Self-Sufficient in Oil Longer

BRITAIN'S North Sea oil will last well into the next century, industry leaders are predicting. This is thanks to new drilling and recovery methods and more rigorous management of available petroleum reserves.

John Browne, managing director of British Petroleum, one of the largest North Sea operators, says that in the next 20 years the region could produce quantities of oil close to those listed in the last two decades.

The key to continuing high-production levels, Mr. Browne says, is a combination of sophisticated technology and lower operating costs. A new British petroleum tax regime also will encourage companies to intensify efforts to bring more oil ashore, he says.

Just two or three years ago there were gloomy predictions that the North Sea oil industry, centered in the Scottish city of Aberdeen, was entering a ``mid-life crisis'' and could look forward to a miserable old age.

Oil prices were dipping worldwide and the region's oil rigs and platforms were showing their age.

Higher safety standards, forced on oil companies after the devastating Piper Alpha explosion in 1988, added to the uncertainty. Fields producing more

Now optimism is on the rise. It is being boosted by ingenious projects aimed at squeezing existing fields to produce yields far higher than was ever thought possible.

Shell and Esso oil companies, joint owners of the Brent field, have invested 1.3 billion British pounds (US$1.9 billion) in a scheme to repressurize existing wells.

Brent is the largest field in the North Sea's British sector, and the two companies are modernizing the oil platforms in the area. Walter van der Vijver, Aberdeen manager of the field, forecasts that oil will still be bubbling up 10 years after 1998, when the field was originally expected to close.

Hopes of a longer life expectancy for existing oil and gas wells also are being boosted by new equipment designed to enable pumping on the seabed instead of on oil platforms.

David Appleford, managing director of Alpha Thames Engineering, says his firm's seabed pumping system will make it possible for North Sea companies to lift oil profitably in areas previously thought too expensive to produce.

Oil extracted in this way, he says, could be pumped up to 50 miles to an operational platform, and then taken ashore. Using the same type of equipment, the output of several currently uneconomic small wells could be piped to a single recovery platform.

Mr. Appleford says the system will cut field-development costs by one-half.

Another major advance has been the introduction of floating cranes. In the past, cranes could lift loads of only 1,000 tons of oil. Now machines capable of hoisting 10,000 tons are being used. This means in turn that much of the equipment can be assembled on-shore, where costs are much lower.

Encouraged by future prospects, the larger oil companies have begun increasing their North Sea spending. In September, for example, British Petroleum raised its 1 billion British pounds (US$1.48 billion) a year investment by 10 percent and forecast that oil and gas production would increase by 6 percent by 1995. Advanced technology

New oil discoveries also continue to be made. Early this month, Amerada Hess, a United States oil company, announced the discovery of oil in an area east of Aberdeen where past efforts had yielded only dry holes.

Amerada used advanced seismic and drilling techniques but has so far declined to say how big the field is.

New technology, including the use of unmanned platforms that have to be visited only once a year, is expected to make it possible for oil companies to become more profitable by reducing their labor force.

In the next 20 years or so, oil jobs in the North Sea area will fall from 51,000 to around 40,000, according to a statement by Grampian Regional Council, the authority responsible for the North Sea area.

In the meantime, oil output is continuing to rise. The Royal Bank of Scotland says last August it reached its highest level in nearly three years, at 2.1 million barrels a day.

The latest trends have been welcomed by the British government, which in the last 20 years has depended heavily on receipts from North Sea oil.

Energy Minister Tim Eggar says Britain's reserves are ``far from played out.''

He puts current capital investment in the North Sea at nearly 5.5 billion British pounds (US$8.15 billion) a year - the highest since the early 1970s.

In September, however, Mr. Eggar warned an international oil conference in Aberdeen that the industry's future success in the North Sea depended on reducing costs, exploiting new technology, and making the most of potential reserves.

Browne, of British Petroleum, says he expects new technology to increase the proportion of recoverable oil reserves from the present average of 45 percent of oil in the ground to as much as 70 percent in some fields.