THE amount of oil recoverable from UK fields could fall by 20 per cent as a result of the coronavirus crisis according to an expert analysis which will heighten fears about the future of the North Sea.

Rystad Energy has cut its estimate for the amount of oil that it would be economically viable to produce in the UK in coming years to 12 billion barrels from 15 billion.

The finding by the energy consultancy underlines the scale of the challenge posed by the coronavirus, which has triggered a dramatic fall in the price of crude.

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This reflects the drop in demand caused by lockdowns imposed around the world to slow the spread of the coronavirus.

While some countries are easing lockdowns Rystad reckons the pandemic will have a lasting impact on the oil market with total demand for crude likely to peak earlier than expected.

The change in Rystad’s estimate reflects the expectation that oil firms will rein in exploration activity in UK waters following the worsening in the outlook for demand. It could accelerate the trend for firms to shut in fields before all the oil they contain has been produced.

In a move that will be regarded with concern by industry champions in the UK, Rystad said it has revised down its expectations for some of the most uncertain exploration opportunities in the North Sea and Atlantic Margins.

Hopes mounted in recent years that relatively under-explored areas such as West of Shetland could contain enough oil and gas to fuel decades’ worth of activity.

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The Oil and Gas Authority encouraged firms to explore in the Rockall basin off Scotland’s west coast as the industry emerged from the slump triggered by the crude price plunge from 2014 to 2016.

However, exploration drilling fell to record lows in the North Sea amid the resulting downturn.

Rystad has also reduced its estimates of the amounts of shale oil that is likely to be recovered form onshore fields in the UK.

The change in the estimates comes amid signs that oil and gas firms are preparing to reduce activity levels significantly in the North Sea.

Rystad predicted last week that investment in new UK North Sea assets will plunge by around 30 per cent this year to $5.6 billion (£4.5bn), from $7.8bn in 2019.

Last month EnQuest announced plans to shed around 530 jobs after deciding not to resume production from the Thistle and Heather fields, which it shut in last year for remedial work.

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Campaigners at Greenpeace said of Rystad’s forecast:” This is a stark prediction for the UK oil industry, and is yet more evidence that we need an urgent shift to renewable energy.”

Rystad’s forecast for the total amount of oil that will be recovered around the world has been cut by 13%, 282bn barrels, to 1,903bn barrels. This takes account of existing fields, undeveloped finds and the potential to make further discoveries.

“Non-OPEC countries account for the lion’s share of “lost” recoverable resources with more than 260bn barrels of undiscovered oil now more likely to be left untouched, especially in remote exploratory areas,” said Rystad’s head of analysis, Per Magnus Nysveen.

Rystad said OPEC countries would be much more resilient to the current crisis.

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Producers in the Middle East benefit from lower production costs than firms working in the North Sea.

Rystad reckons the amount of oil recoverable in Norway will fall by 7bn barrels to 20bn barrels. It said Norway would have to leave more reserves in the ground in the Barents Sea citing “ little exploratory success and the assumption that Covid-19 will bring peak oil demand sooner”.

The amount of reserves recoverable by Saudi Arabia are expected to increase by 25bn barrels to 299bn barrels. Rystad said Saudi Arabia would be the biggest winner from the deal agreed recently by major Opec+ grouping exporters to curb production to support the market.

Demand for oil could be impacted by changes in behaviour and the increasing availability of lower carbon alternatives to oil amid the global drive to reduce emissions.

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BP chief executive Bernard Looney said last month that the impact of the coronavirus on demand could last longer than the pandemic.

It has left him increasingly convinced the oil giant needs to invest more in renewables. “Could it be peak oil? Possibly,” he told the FT.

On Tuesday BP said it would write $8bn to $10bn off the valuation of its intangible exploration assets.