UK trade body sounds alarm on North Sea

LONDON, February 23, 2016 – The persistent oil price slump could result in 43% of the UK’s continental shelf (UKCS) fields operating at a loss, UK Oil & Gas, the country’s trade association for the offshore oil and gas industry, said in a report Tuesday.

The industry body’s 2016 Activity Survey further noted that spending on new projects will dip below USD 1.4 billion in 2016. Average reinvested revenues over the past five years always hovered around USD 11.3 billion per year.

Total capital expenditure for 2016 is expected to come out at USD 12.7 billion, compared with USD 20.8 billion and USD 16.3 billion in 2014 and 2015, respectively.

UKCS production came out at 1.64 million boepd in 2015, a 10% increase over 2014 and the first output growth in 15 years. However, because of lower oil and gas prices, 2015 revenues dropped by 30% to reach USD 25.5 billion.

According to UK Oil & Gas, the UKCS can still yield as many as 20 billion boe.