Economic Report 2013

Figure 10: Actual and Forecast Production from 2005 to 2017

Looking to the mid-term future, production is expected tobe similar in2014before improving again, potentially rising towards two million boepd in 2017. This potential reinforces the need to improve production efficiency (see below) and the significance of the work of the government-industry task force, PILOT (see ‘The Road to 2040’ on page 31) and the Wood Review mentioned in the Foreword. Production efficiency – the ratio of actual production to the maximum potential – fell to 63 per cent in 2011, with a further fall to about 60 per cent expected in 2012 when all data are available. Paradoxically, this came against a backdrop of high oil prices, record capital investment and man-hours expended offshore. Average production efficiency of the UKCS was in the high 70s of per cent just four years ago and around 80 per cent seven to eight years ago. The recent decline has resulted from deteriorating reliability, with extended maintenance shutdowns, compounded by several major production outages mentioned above. Had such efficiencies been maintained in 2012, production would have been almost half a million boepd higher. The government and industry are working together to combat the various issues affecting production and are charting a course to return to such overall efficiencies. Production Efficiency

3.5

3.0

Actual Production

2.5

2.0

1.5

Forecast Range

Million boepd

1.0

0.5

0.0

2005

2007

2009

2011

2013

2015

2017

Source: Oil & Gas UK Source:Oil&GasUK

Figure 11: Production Efficiency of the UKCS

90

85

80

75

SNS and IS CNS

70

NNS and WoS UKCS Average

65

60 Production Efficiency (%)

55

50

2004

2005

2006

2007

2008

2009

2010

2011

Source:DECC

Source: DECC

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ECONOMIC REPORT 2013