10 must-know facts from the oil & gas UK economic report 2014
4. £26 billion spent in UKCS expenditure
Total expenditure rose by over 20% to almost £26 bn with capital investment accounting for more than half of the increase. Since 1970, the industry has spent upwards of £525 bn on exploration. In 2013 drilling and field development accounted for £330 million, the largest collaborative expenditure last year.
5. 15.5% rise in operating costs expenditure
Total operating expenditure rose to £8.9 bn with unit operating costs continuing to rise to an average £17 per boe. The number of fields with a UOC greater than £30 doubled during the year.
6. 43 bn boe recovered from UKCS
43 bn boe of oil and gas have been recovered from the UKCS since the recovery began. Further overall recovery is forecast to be between 15-24 bn boe. Taking into consideration the current investment plans, new projects have the ability to deliver 10.7 bn boe.
7. £14.4 bn spent on capital investment
Capital investment was the highest ever recorded, with Oil & Gas UK expecting costs to remain above £10 bn in 2014. Total investment committed to new field developments and brownfield projects swelled to £39 bn.
8. 13 new fields come on-stream
13 new fields came on-stream in 2013 bringing 392 million boe into production. The DECC (Department for Energy and Climate Change) approved 10 new fields, which could yield over 460 million boe over time, as well as 26 brownfield projects.
9. 120 development wells created
Drilling activity increased with 120 development wells, 29 appraisal wells, and 15 exploration wells completed. Although 20 of these were abandoned due to security and finance, 80 million boe of recoverable resources were discovered.
10. 450,000 jobs supported by industry
Highly skilled and well paid, the industry supported 450,000 jobs which include 200,000 in the supply chain and 112,000 in jobs induced by the economic activity created by the industry. 36,000 were employed by operating companies directly.
FUTURE FOR UKCS
As the Economic Report reveals, there is a growing need for further exploration in the UKCS to find new resources to tap into, in a market where the country’s presence and ROI compared to 10 years ago, has shrunk globally.
Oil & Gas UK sees the need for action on 3 levels: more radical tax changes, full implementation of the Wood report, and the industry collaborating to reduce the costs and inefficiencies that are now challenging the production of oil and gas in the UK.
For those within the industry, share your thoughts on the Economic Report on the blog below.
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