Boost for offshore UK production may be short-lived

Offshore staff

LONDONOil and gas production offshore the UK appears to have risen by 7% last year, according to industry association Oil & Gas UK.

This represents the first increase for the sector in more than 15 years. However, CEO Deirdre Michie cautioned that the industry faces a tough challenge to sustain the improvement into 2016 and beyond.

Michie said UK government data for the first 10 months of 2015 showed that the total volume of oil and gas produced on the UK continental shelf was up by 8.6% on the same period in 2014.

“In February 2015 we predicted a marginal increase in production for 2015,” Michie added, “but the industry-wide focus on improving production efficiency coupled with investments of more than £50 billion [$73 billion] over the last four years to bring new fields onstream across the last 12 months is paying off and yielding a better result.”

Last week TAQA produced first oil from the Cladhan field northeast of Shetland, and output here could reach 10,000 b/d.

On the other hand, Michie pointed out, “While the UK offshore oil and gas industry is having to adapt to the low oil price and driving greater efficiencies throughout its operations the fact is that the value of our product has more than halved. Times are really tough for this industry and for the people working in it…”

Britain’s supply chain, she suggested, has a big part to play helping the industry unlock the remaining 20 Bboe estimated to be recoverable.

“Oil & Gas UK’s industry-lead Efficiency Task Force will lead the drive for greater cooperation across the sector. Having launched The Industry Behaviours Charter as a catalyst for change and the Rapid Efficiency Exchange, an online portal where companies can share common problems and highlight successful solutions, we look forward to shortly highlighting results from a number of other initiatives – including a project from operating companies to share inventories and results of a study into compression systems.

“In addition, industry is targeting a 50% reduction in drilling costs to ensure the basin remains globally competitive.”


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