North Sea oil find could reap UK government £2bn

Shares in five oil companies soared yesterday after drilling discovered a reservoir in the North Sea that could hold up to 120 million barrels of extractable oil. Although small compared to BP's billion-barrel Tiber discovery in the Gulf of Mexico last year, the new prospect in the Catcher oil field off Aberdeen is the biggest since the Buzzard reservoir - with five hundred million extractable barrels of oil - was discovered in 2001.
Encore Oil, the leading stakeholder in the drilling operations, said further investigation could add "very significantly" to expectations. Shares in the company rose 50 per cent to 52p. Meanwhile, shares in the other stakeholders, Premier Oil, Wintershall, Nautical Petroleum and Agora Oil and Gas, also rose.
North Sea oil production has declined over the last decade, but it is still expected to contribute £7.6bn in corporation tax to the UK exchequer this year. Based on a (somewhat conservative) barrel price of $80, the new Catcher discovery would add £2bn to that over the next decade.Oil production in the North Sea is now around 500 million barrels a year, but there is still thought to be a significant quantity of oil to be found in some areas, such as west of Shetland. Despite this, interest in North Sea oil exploration has foundered as the big companies look to potentially more lucrative prospects off Brazil, Australia and West Africa.Read a full report at the Scotsman ·