NEWS
F
n
s.
toill/
REPORT PAINTS BLEAK PICTURE OF HIGH-POTENTIAL INDUSTRY
BUT THE SOLUTION IS CLEAR, SAYS OIL & GAS UK
Oil & Gas UK’s new report on offshore exploration, investment and production published today
(24 February) provides striking evidence of how rising costs, taxes and inadequate regulation
have taken their toll on the UK industry’s international competitiveness. The Activity Survey
2015 highlights the urgency with which measures are needed to secure new investment and
address the collapse in exploration, if the UK is to maximise economic recovery of its still
significant untapped resources.
M
alcolm Webb, Oil & Gas UK’s chief executive, said:
“This year’s Activity Survey paints a bleak picture but
also identifies this region’s potential, emphasizing
the importance of Government and industry now putting the
right measures in place to secure its long-term future. This is
crucial not only for the energy security that domestic oil and gas
production provides but also for the hundreds of thousands of
highly skilled jobs, advanced technology and billions of pounds
of exports which the industry underpins.
“Without sustained investment in new and existing fields,
critical infrastructure will disappear, taking with it important
North Sea hubs, effectively sterilising areas of the basin and
6
HSE INTERNATIONAL
leaving oil and gas in the ground.”
The survey reports that 6.3 billion barrels of oil equivalent
(boe) are sanctioned or under development. There are another
3.7 billion boe of potential investment opportunities, although
companies indicated at the end of 2014 that less than two billion
boe of those were likely to be developed.
Operating expenditure rose by almost eight per cent to £9.6
billion in 2014 and on a unit of production basis, reached a
record high of £18.50/boe. Falling oil prices meant that revenues
fell to just over £24 billion for the year, the lowest since 1998,
and this, combined with rising costs, resulted in a negative cashflow of £5.3 billion for the basin, the worst since the 1970s.