Economic Report 2016 - Oil & Gas UK

It is important to note that commitment to safe operations remains key for the industry and the reduction in operating expenditure in no way compromises this objective. Latest health and safety statistics 23 show that in 2015 there were no fatal incidents offshore in the UK and the non-fatal injury rate remains lower than that of other industrial sectors such as manufacturing and construction. Injuries lasting more than seven days reached an all-time low on the UKCS in 2015 and the number and severity of hydrocarbon releases remains on a long-term downward trend at almost 70 per cent lower than its peak in 2004 and almost 20 per cent lower than 2012 – the last time operating expenditure was this low.

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2

Figure 29: Operating Expenditure versus Hydrocarbon Releases

3

12

300

Hydrocarbon Releases

4

Operating Expenditure (2015 Money)

10

250

8

200

5

6

150

6

4

100

Number of Hydrocarbon Releases

2

50

7

Total Operating Expenditure (£ Billion - 2015 Money)

0

0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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Source: The Health and Safety Executive, Oil & Gas UK

The Long-Term Solution As the belief in ‘lower for longer’ oil and gas prices grows, the need for sustained change in how the industry does business has become more apparent to achieve savings over the long-term. There is little room for further cost-cutting activity and industry must instead invest in solutions that will restrict UOC growth into the next decade, even when production begins to fall again. Oil &Gas UK’s Efficiency Task Force is leading a number of pan-industry initiatives to ensure a long-term sustainable business model for the sector that is robust against a backdrop of declining production and a $50/bbl oil price. More information on the Task Force can be found in section 8.

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10

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23 Oil & Gas UK’s 2016 Health and Safety Report is available to download at www.oilandgasuk.co.uk/healthandsafetyreport

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