Activity Survey 2014

7. Operating Expenditure The cost of operations on the UKCS rose by 15.5 per cent to £8.9 billion in 2013. This comes on top of a ten per cent increase in 2012. Operating expenditure, even when inflation is taken into account, is the highest since production began on the UKCS more than four decades ago. Current indications are that costs are likely to rise further in 2014 to around £9.6 billion, putting further pressure on the cost base and then stabilising thereafter. Given past performance, there must be some doubts that operating costs can be contained without intervention.

1

2

3

Figure 19: The Cost of Operating on the UK Continental Shelf

12

4

10

5

8

6

Actual Forecast

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4

7

2

Operating Cost - £ Billion (2013 Money)

0

8

2002

2004

2006

2008

2010

2012

2014

2016

2018

Source: Oil & Gas UK

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10

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