Extra 2.8 billion barrels
Oil and gas production over the period 2016–2050 is now projected to total 11.7 billion barrels of oil equivalent (boe) according to new projections from the Oil and Gas Authority.
The “Projections of UK Oil and Gas Production and Expenditure” report published today, includes an updated long-term projection for production between 2016 and 2050. This is 2.8 billion boe higher than the production volume expected in the absence of implementation of the recommendations of the 2014 Wood Review.
Data collected from the OGA’s 2017 annual Stewardship Survey informed the new analysis which confirms that UK production was sustained at its highest rate since 2011 and is expected to increase in 2018 as new fields come on stream.
In 2017, production was an estimated 1.63 million barrels of oil equivalent per day, the same rate seen in 2016. This was despite the Forties’ pipeline closure in December 2017, without which production would have risen slightly.
Operating costs in the basin are estimated to have risen by 3% last year while capital expenditure again fell significantly:
Other findings of the report include:
- Capital expenditure (CAPEX) for later years are slightly higher than previously published. However, CAPEX fell significantly for the third consecutive year and is expected to continue to fall for the foreseeable future.
- Total operating costs (OPEX) rose marginally in 2017, however it is still 27% below the 2014 high. After 2018, OPEX is expected to fall with production, stabilising what is now considered a more sustainable level of unit operating cost (UOC).
- Decommissioning costs rose 4% in 2017 and are expected to stay at around current levels in the medium term. The latest decommissioning cost projection to 2022 is slightly lower than the previous estimate.
The OGA’s chief executive, Dr Andy Samuel said: “The extra 2.8 billion barrels identified shows the future potential of the basin which could be boosted further through investment and exploration successes. 2017 continued to be a productive year and production levels are set to rise in 2018 as more new fields come on-line. The OGA continues to work in partnership with industry and government in maximising the economic recovery of our resources and in pursuit of the considerable prize highlighted by Vision 2035.”
The Projections of UK Oil and Gas Production and Expenditure Report is availableon the OGA website by clicking here.