Activity Survey 2014

ACTIVITY SURVEY 2014

With continued high demand for supply chain services, cost pressures are clearly taking their toll on the UKCS. That said, capital efficiency has barely changed over the last 12 months and appears to have reached a ceiling, in part, reflecting investors’ reluctance to sanction investments above last year’s cost limits. This indicates that further cost increases may result in rapidly diminishing returns unless productivity improves.

Figure 18: Capital Efficiency on the UK Continental Shelf

1.2

1.0

0.8

0.6

Indexed (2002 base) Capital Efficiency (boe/£)

0.4

Capital Efficiency (boe/£)

0.2

0.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Oil & Gas UK

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