Oil & Gas UK Activity Survey 2016

Unit Operating Costs The operating cost reductions seen over the last 12 months look particularly impressive when assessed on a cost per unit of production basis. A 15 per cent operating cost reduction alongside a 9.7 per cent production increase has led to a 28 per cent fall in unit operating costs, from $29.30/bbl to $20.95/bbl (from £17.80/bbl to £13.70/bbl). So far companies have been able to improve or maintain production levels while simultaneously reducing operating costs. If further cost reductions and efficiency improvements are achieved, unit operating costs could fall to as low as $17/bbl (£11/bbl) by the end of this year.

1

2

3

Figure 37: Unit Operating Cost Outlook

4

35

30

5

25

20

6

Range

15

10

5

Unit Operating Costs ($/boe - 2015 Money)

0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Oil & Gas UK

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