Oil & Gas UK Economic Report 2014

New Developments • Thirteen new fields came on-stream, bringing 392 million boe into production. • DECC approved ten new fields, which will yield 460 million boe of production over time, as well as 26 brownfield projects of various sizes. Drilling Activity • The number of wells drilled (including sidetracks) was: o 15 exploration wells o 29 appraisal wells o 120 development wells • Twenty exploration and appraisal wells were postponed and four were cancelled because of difficulties in securing rigs and/or finance. • Some 80 million boe of recoverable resources were discovered, taking the total to only 100 million boe since the start of 2012.

Employment • The industry supported some 450,000 jobs, many highly skilled and well paid, across the whole economy, with: o 36,000 employed by operating companies o 200,000 employed in the supply chain o 112,000 in jobs induced by the economic activity of the above employees Decommissioning (in 2013 money) • Decommissioning expenditure was around £900 million and is likely to rise to an average of £1.3 billion per year for the rest of this decade, with a peak of £1.7 billion in 2016. • Some 475 installations, 10,000 kilometres of pipelines, 15 onshore terminals and 5,000 wells will eventually have to be decommissioned. • From 2014 to 2040, £37 billion is forecast to be spent on decommissioning of existing assets. • Expected new investment in future developments would add £3.6 billion to the total, although much of this expenditure will be after 2040. o 100,000 in the export of goods and services

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Editorial Notes: • A Glossary of Terms and Abbreviations is included in the Appendix. • The drafting of this report was undertaken during June and July 2014.

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ECONOMIC REPORT 2014