UK faces development funding difficulties
Operators could struggle to attract funds for all 90 UK oil and gas discoveries set for development between now and 2015, according to analysts Hannon Westwood.
GLASGOW, UK – Operators could struggle to attract funds for all 90 UK oil and gas discoveries set for development between now and 2015, according to analysts Hannon Westwood.
Director Jim Hannon said: “The capex requirement is estimated at around $33 billion, but based on current form in terms of UKCS [UK continental shelf] financing there will probably be a funds gap of at least 50% or more, depending on how successful the UK will be at attracting discretionary funds from global budgets towards the UKCS; and whether small or emerging companies on the UKCS can secure new funds.
“At stake are over 2.6 Bboe of oil and gas within this development sector and over 600,000 boe/d on plateau. The tax take alone in this business sector is estimated at around $44 billion and part of this might be lost or deferred depending on the ability of the pipeline export system to remain intact while awaiting funds to swing towards the UK.
“We believe that it would take an unprecedented alliance between government, oil companies, banks, and the service sector to exploit the opportunity in front of us.”