Hot air in gas shortage talk

FOR all the talk about North Sea reserves running out, Britain will remain self-sufficient in oil and gas for two years and perhaps more.

Fears of a gas shortage next winter are overdone, says the UK Offshore Operators Association.

Though gas prices, now 20p a therm, have soared to 38p for winter delivery, UKOOA commercial director Mike Tholen said: 'If we have a normal winter, everything is completely hunky-dory.

'Even in a cold winter, we can meet demand. We are approaching the edge, but are by no means over it.'

After 10 years of exporting surplus gas, Tholen admitted: 'Things are starting to change.' But he pointed to a string of import projects, saying: 'There is a lot of gas coming. If it all comes at the same time, we will have too much.'

North Sea exploration fell sharply after Gordon Brown slapped on a £5bn supplementary corporation tax rise in April 2002, but it is picking up again, with 22 wells drilled so far in 2004, against 32 in the whole of last year. This is important as the North Sea industry nears 'middle age', said Tholen.

New finds are half the size of 10 years ago. Bills of at least £9bn are looming to dispose of old rigs and platforms.

The problem is how to slow the inevitable decline, from a peak of 4.2m barrels a day to a forecast 2.5m in 2010. The industry's Pilot plan aims to boost this to 3m barrels, although it is behind schedule.

But the North Sea's 250 fields should keep us sel-fsufficient in gas until 2005/6 and in oil until 2007/8.

UKOOA chief executive Malcolm Webb said: 'It is one of this country's major economic successes.'

Including support jobs, the industry employs 260,000 people.

Britain is the seventh largest global oil and gas producer.