Oil and gas reserves challenge
Up to 25 billion barrels of oil and gas could be recovered from the North Sea and other parts of the UK coast, but the UK Government will have to work closely with the industry to unlock remaining reserves, according to a new report.
Oil & Gas UK, which represents the offshore industry, said extra investment and exploration would be needed to recover all the fuel.
Firms planned to invest £21bn in the next five years, targeting around 2.7 billion barrels, but there was substantially more left to recover.
Malcolm Webb, Oil & Gas UK's chief executive, said: "There is little doubt that the need to maximise recovery of the UK's remaining oil and gas reserves is a matter of national importance and one that is well understood by government at the highest level.
"The UK's oil and gas basin contains up to 25 billion barrels of oil and gas that we could ultimately recover. Plans currently in place should reach about ten billion of those barrels so the challenge in the hands of the government and industry is how to achieve the remaining 15 billion barrels.
"While realising this goal will require massive further investment from the industry, at $100 per barrel, it is worth $1.5tr to the British economy and this is a prize which the country should not contemplate losing.
"Barrels left in the ground do not pay taxes, do not sustain jobs, do not help secure the nation's energy supply and provide no support to the country's balance of payments.
"We look forward to continuing discussions with the Treasury on ways to increase the competitiveness of the UK oil and gas basin and how targeted incentives might boost investment in the UK's oil and gas reserves so that the nation can continue to reap the numerous benefits that flow from having a strong indigenous oil and gas industry for many decades to come."
Oil and gas prices have risen almost threefold since 2001, but the cost of developing a barrel from the North Sea or other UK offshore areas has risen fivefold, said the report.
The industry spent £12.4bn last year on exploration, development and production, the same as in 2006, but the figure disguised a "worrying" drop in the money spent bringing new reserves into production.
Rising costs meant the investment was only a third as efficient as five years ago, resulting in fewer new reserves being brought into production, the report said.