33 / 84
33
1
2
3
4
5
6
7
8
9
10
11
Figure 20: Development Drilling
0
5
10
15
20
25
30
35
40
45
50
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
2010
2011
2012
2013
2014
2015
2016
Development Wells Spudded including
Geological Sidetracks
Source: OGA
5.3 Total Expenditure
The collapse in oil price since the second half of 2014 has put the
industry under immensepressure to reduce its expenditure in all areas
to secure sustainable operations, while upholding the imperative
to maintain safe production. The readjustment of budgets and
rationalisation of expenditure was evident over the course of 2015
and has continued this year, alongside efforts to increase efficiency
at a company and pan-industry level (see section 8 for more on the
Efficiency Task Force). Many operators have cut capital investments
and reduced operational costs to improve their cash-flow.
Total expenditure on the UKCS fell by almost £5 billion in 2015 from
£26.6 billion to £21.7 billion, in spite of an increase in production
of 10.4 per cent. Expenditure is likely to fall further this year to
around £19 billion as companies continue to make efficiency gains,
reduce costs and preserve capital to make their businesses robust
at current prices.
Many operators
have cut capital
investments and
reduced operational
costs to improve
their cash-flow.