Economic Report 2016 - Oil & Gas UK

It is anticipated that the fall in operating costs will slow during 2017, levelling off at around £7 billion per annum for total operating costs and a UOC of $14-15/boe. The majority of companies have already carried out significant reduction programmes and streamlined operations as far as they can in the near-term.

1

Figure 26: Change in Operating Costs with Impact of New Start-Ups

2

10.0

9.7

Reduction from Existing Fields Contribution from New Fields

9.5

3

9.0

4

8.5

8.2

8.2

8.0

8.0

7.5

5

7.5

Total Operating Costs (£ Billion)

7.0

7.1

6

6. 0

2014-15

2015-16

7

Source: Oil & Gas UK

Figure 27: Unit Operating Costs

35

8

30

9

25

20

10

15

10

11

5

Unit Operating Costs ($/boe - 2015 Money)

0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Oil & Gas UK

39