WIRELINE ISSUE 31 SPRING 2015

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W I R E L I N E - I S S U E 3 1 S P R I N G 2 0 1 5 2 1
ise stated)
Only eight to 13 exploration
wells are forecast to be drilled
in 2015 as the lower oil price
adds to existing barriers
8 to 13
wells in
2015
Investment is forecast
to fall sharply to
£9.5–11.3 billion in 2015,
depending on current
project performance
and investment
1.42 million boe
per day produced,
slowing production decline
1.42
million
barrels of oil equivalent
£1 billion spent on
decommissioning activity,
the highest annual spend
on record
£1billion
de
nities
ds
£9.5 billion in 2015
“
”
This year’s Activity Survey is clear
on the challenges we face, but also identifies
this region’s potential, emphasising the
importance of government and industry
putting the right measures in place to
secure its long-term future.
ACTIVITY SURVEY 2015 FACTS & FIGURES
Download the report at
Q&A – Oil & Gas UK’s
economics and commercial
director Mike Tholen
Q:What does the 2015 Activity Survey
show– andwhat must industry
do next?
A: This year’s Activity Survey is clear on
the challenges we face, but also identifies
this region’s potential, emphasising the
importance of government and industry
putting the right measures in place to secure
its long-term future. This is crucial, not only
for the energy security that domestic oil and
gas production provides, but also for the
hundreds of thousands of highly skilled jobs,
advanced technology and billions of pounds
of exports that the industry underpins.
The report noted, worryingly, that
investment in currently sanctioned
projects will fall to £2.5 billion by 2018.
A combination of cost and efficiency
improvements of up to 40 per cent are
needed to give this basin a viable future –
and the more we can invest our way out, the
less we need to rely on cost control alone.
Q: Howdoes the newregulator, the
Oil andGas Authority (OGA), fit
into this?
A: We said at the launch of the Activity
Survey that concerted effort on three fronts
is needed – tax, regulation and cost – to
make the basinmore attractive to global
investors. Government has taken important
steps to implement theWood Review
recommendations –we now need to see
full delivery of those recommendations, in
particular the prompt establishment of a
well-resourcedOGA.
Q:What do the announcements
made inBudget 2015mean for
the industry?
A: Budget 2015 has laid strong foundations
for regeneration of the UKNorth Sea
through the ten percentage point reduction
in the supplementary charge, which reduces
the headline rate of tax to 50 per cent;
promise to cut petroleum revenue tax by
15 percentage points fromnext year; and the
new, simplified, Investment Allowance. It
is in the hands of our industry now to build
on this by delivering the cost and efficiency
improvements required to secure our future.