Economic Report 2016 - Oil & Gas UK

Production increased by 10.4 per cent in 2015, with liquids (58 per cent of the total) up 12.8 per cent and net gas 25 (42 per cent of the total) up by 7.2 per cent. This represents a year-on-year production increase of 57 million boe or 155,000 boe per day (boepd). The key drivers were: • Field restarts (~46 million boe) – Elgin Franklin, Rhum, Shearwater, Banff, Gannet, Pierce and Andrew are all examples of fields that were previously shut-in for various reasons but are now back on-stream and increasing in output. • New field start-ups (~33 million boe) – despite some project delays, 12 fields have come on-stream since January 2014. The Golden Eagle Area, Kinnoul, Enochdhu, Ythan, Alma Galia, and Cladhan made the most notable contributions to 2015 production. • Existing assets (less ~22 million boe) – despite many assets now at the tail end of their productive life, delivery from existing fields was above expectation with the average decline rate slowing from 12 to 4 per cent. Record capital investment and operational expenditure in recent years, as well as the work of the Production Efficiency Task Force, appear to be the catalyst for the improvement in reliability and integrity of existing assets leading to increased output. Figure 31 illustrates the source of the production increase by asset type and region. Most of the new start-ups and restarts are in the CNS region. A rise in production has also been seen in the northern North Sea (NNS), where many of the efficiency improvements have been realised, and the west of Shetland (W o S), which continues to ramp up production as the basin’s least mature region with much ongoing development. In the SNS area, where 15 fields ceased production during 2015, a long-established trend of production decline continued.

1

2

3

4

5

6

7

Figure 31: Production Increase from 2014 to 2015 by Asset Type and Region

90

80

8

70

W o S

New Field Start-ups

NNS

60

9

50

40

30

CNS

10

Field Restarts

20

10

0

11

-10

Existing Assets

SNS / Irish Sea / Onshore

2015 versus 2014 Net Production Change (Million boe)

-20

-30

Source: OGA, Oil & Gas UK

25 Net gas excludes producers’ own use offshore.

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