Oil & Gas UK Economic Report 2014

Operating costs per field have also risen, particularly over the last three years. In 2011, the average cost of operating a field was £23 million compared with almost £30 million in 2013. Such rising costs become all the more concerning when put in the context of declining production in recent years. Not only have fields become more expensive to operate, but their output has fallen.

The net result is that the average unit operating costs (UOCs across the UKCS in 2013 are now 62 per cent higher (at £17/boe) than they were as recently as 2011 (£10.50/boe). See Figure 20 opposite. It should, however, be noted that there are still over 50 fields on the UKCS whose operating costs are less than £10/boe, while a growing number of fields, now as many as 19, have a UOC greater than £30/boe.

Figure 19: Average Operating Cost per Field

35

30

25

20

15

2013 Money

10

5

Average Operating Cost per Field (£ Million)

0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: DECC, Oil & Gas UK

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ECONOMIC REPORT 2014