Oil & Gas UK Activity Survey 2016

ACTIVITY SURVEY 2016

challenge in the current business environment. The newly established MER UK Forum replaces PILOT and the Oil and Gas Industry Council, bringing together all key stakeholders. It has drawn up a focussed agenda to help respond to the downturn. The MER UK Forum’s meetings coincide with those of the Fiscal Forum with HM Treasury and are attended by relevant government ministers. Industry took the lead in responding to the challenges it faced during 2015. A combination of cost reduction and efficiency improvements have already delivered an effective response to the $50-60 world anticipated a year ago, leading to unit cost reductions of 28 per cent and a production increase of 9.7 per cent. Figure 7 provides a summary of the industry’s performance in 2015, including a comparison of outturn against the forecast given 12 months ago.

Figure 7: Industry Key Metrics Scorecard for 2015

2014 Actual

2015 Forecast

2015 Actual

Production (million boepd) Operating Costs (£ billion) Unit Operating Costs ($/boe) Unit Operating Costs (£/boe) Capital Investment (£ billion) Exploration Wells Spudded Appraisal Wells Spudded

1.49

1.50 8-10

1.64

9.7

8.2

29.30 17.80

26-27 16-17 9.5-11

20.95 13.70

14.8

11.6

14 18

8-13

13 13

<5

Source: Oil & Gas UK

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