UK offshore production on the rise, capex set to recover
Britain’s offshore oil and gas production rose by more than 4% in 2018, according to the Oil & Gas Authority, averaging 1.7 MMboe/d.
ABERDEEN, UK– Britain’s offshore oil and gas production rose by more than 4% in 2018, according to the Oil & Gas Authority (OGA), averaging 1.7 MMboe/d.
The OGA now expects total output across the sector during period 2016-2050 to be 3.9 Bboe higher than in projections issued in March 2015.
Compared with the forecast last year, it added, this is equivalent to a further four years of production from the UK’s currently largest producing oil field.
Last year’s total oil production was up by 8.9% on the previous year and represented the highest UK oil production rate since 2011.
This is due to a combination of more than 30 new fields coming onstream since 2015; generally improved production efficiency and asset integrity; implementation ofenhanced oil recovery projects; and the focus of UK offshore licensing rounds on exploration, appraisal, and development commitments.
The OGA provided these statistics to the UK’s Office for Budget Responsibility ahead of the Chancellor’s Spring Statement on March 13. The data was supplied by UK operators.
Other findings of the ‘Projections of UK Oil and Gas Production and Expenditure Report’ report include:
- Total opex across the sector rose by 6.4% due to higher activity
- Capex fell for the fourth straight year, although a 4% increase looks likely in 2019
- Decommissioning expenditure rose by 9% last year to £1.45 billion ($1.89 billion), reflecting the higher level of activity taking place. The projection for 2019-2023 estimates total costs 18% lower than in last year’s assessment.
Loraine Pace, head of Performance, Planning and Reporting at the OGA, said that recent large UK offshore gas discoveries such asGlendronach and Glengorm highlighted the future potential of the basin. This could be boosted further by new investment, exploration successes, and resource progression.
“The OGA continually supports industry in efforts to revitalize exploration, through Area Plans and promoting new technologies,” she added.