Oil & Gas UK Economic Report 2014

Total Expenditure (in 2013 money) • Total expenditure on the UKCS rose by over 20 per cent to almost £26 billion, with capital investment accounting for more than half of the increase. • Since 1970, the industry has spent £525 billion, comprising: o £330 billion of capital investment in exploration drilling and field developments • Total expenditure of up to £1,000 billion will be required over the remaining life of the UKCS, if recovery of oil and gas is to reach the upper end of the range forecast under ‘reserves’. Capital Investment on Developments • Capital investment was £14.4 billion, the highest on record. • Oil & Gas UK expects capital investment to remain above £10 billion a year in 2014 and 2015, assuming that new projects continue to be developed as anticipated. • DECC approved capital investment of £8 billion in ten new fields. • Total capital investment committed to new field developments and brownfield projects (fields already in production) totalled £39 billion at the end of 2013. o £192 billion on production operations £3 billion on decommissioning assets that have ceased production o

Operating Costs • Total operating expenditure rose by 15.5 per cent to £8.9 billion. • Unit operating costs (UOCs) also continued to rise, to an average of £17 ($26.5) per boe. • The number of fields with a UOC greater than £30 per boe doubled during the year. Taxation • The industry paid £4.7 billion in corporate taxes on production in 2013-14. • Since 1970, the industry has paidmore than £316 billion (in 2013 money) in such taxes. Reserves • Almost 43 billion boe of oil and gas have been recovered from the UKCS so far. • Further overall recovery is forecast to be in the range of 15-24 billion boe. • Considering the full range of opportunities available, current investment plans have the potential to deliver 10.7 billion boe in total: o 6.6 billion boe from existing fields or those currently under development

About four billion boe from new field and incremental developments which have not yet been approved

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ECONOMIC REPORT 2014