Economic Report 2016 - Oil & Gas UK

9.2 Cost Control

1

Operating costs in the North Sea have been well managed over much of its producing life and have generally been internationally competitive. However, over the last five years, it has become more difficult to control operating costs as global competition for resources has intensified. This scenario has been particularly stark in the UK, with more fields producing beyond their initially intended field life, needing more regular maintenance and intensive asset integrity interventions. In Norway, earlier government intervention ensured that both cost and activity were kept at more sustainable levels with annual operating cost growth never surpassing ten per cent.

2

3

Figure 53: Indexed Operating Costs

160

4

UKCS

140

NCS

120

5

100

80

6

60

Indexed Operating Costs

40

7

20

0

2010

2011

2012

2013

2014

2015

8

Source: OGA, Oil & Gas UK, Norwegian Petroleum Directorate

9

10

11

73