Activity Survey 2015

Figure 32: Capital Investment Outlook for the UK Continental Shelf

1

16

14

2

12

10

3

8

6

Uncertain

Sanctioned

4

4

2

Capital Investment (£ Billion - 2014 Money)

0

2010

2011

2012

2013

2014

2015

2016

2017

2018

5

Source: Oil & Gas UK

Quarter 4 2014 data indicate that only £38 billion in total is currently committed for spend on the UKCS and some of this may be at risk as the oil price continues to fall. In the right environment, a further £26 billion of probable investment could see the development of an additional two billion boe. Sustaining and growing this investment is vital to the long-term future of the UKCS, but without cost and tax reductions, future investment, particularly brownfield, is at significant risk as companies compete for capital globally. A significant change in new investment intentions can already be seen as fresh projects have slipped in time and been reduced in scope. Figure 33 shows investment plans that are yet to receive sanction as of quarter 4 2014 versus the same time last year. A maximum of £3.5 billion of new expenditure will be sanctioned over the next three years, a noteworthy decline from the anticipated £8.5 billion over the same period last year. Looking further ahead, current poor exploration success could further damage longer term investment in the UKCS as few new development opportunities arise.

6

7

8

Figure 33: Comparison of Probable New Capital Investment Outlook

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

2015 2014

Probable Capital Investment (£ Billion - 2014 Money)

2015

2016

2017

2018

2019

Source: Oil & Gas UK

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