Oil & Gas UK Economic Report 2015

7.7 Production

this year. Consequently, Oil & Gas UK believes that production is likely to be no worse than last year and, if fields such as Solan and Laggan Tormore come on-stream, this may lead to a production increase of around three or four per cent. The positive production performance reported so far this year follows on from 2014, when total annual production averaged 1.49 million boe per day (in total 545 million boe) 24 , just 0.2 per cent less than in 2013 and representing the best year-on-year performance in 15 years. Many existing assets were able to slow their reservoir decline rates and reported improved production efficiency, plus new start-ups (Juliet, Kew, Golden Eagle and Kinnoull) supplemented production from existing fields. Performance over the last 18 months indicates that production may be beginning to turn around after particularly poor delivery from 2011 to 2013. Net gas production was up 1.5 per cent last year on 2013, helped by a full year of production from the Jasmine field. Liquids production provided around 60 per cent of the total and was down by 1.4 per cent. This is still the best annual performance since 2000, but was not helped by the delay in a number of new field start-ups.

Provisional data from DECC for the first six months of 2015 shows production to have increased by around three per cent against the same period last year, with initial indications suggesting that production could increase this year for the first time in 15 years. After poor delivery in February, as some key assets were shut-in for all or part of the month, production for the second quarter of the year looks particularly encouraging and early figures suggest that May saw the best overall monthly output since March 2012. Production from the large Golden Eagle field, which only came on-stream in November 2014, has helped crude oil production increase over the first half of this year as well as strong delivery from existing assets (see Section 8 for a case study on the Golden Eagle Area Development). Although natural gas liquids (NGL) production has fallen by around nine per cent, total liquids production is up by around three per cent for the year, as is net gas production. While annual production performance for 2015 is still uncertain and will only become clearer after the summer maintenance season, some sizeable new start-ups are anticipated over the second half of

Figure 43: Monthly Production Performance

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Production (Million boe)

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24 Oil & Gas UK has revised the way it converts gas production from volume units to barrels of oil equivalent based on new data published by DECC. While the production trends are only nominally affected, the new data show that in previous years Oil & Gas UK was being overly-conservative in the conversion from gas to oil. This results in the net gas production estimates being upwardly revised for both our historical and forecast production figures (the revisions are typically around five per cent but vary depending on the calorific value of the gas produced in each year).

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ECONOMIC REPORT 2015