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35
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2
3
4
5
6
7
8
9
10
11
Ongoing investments in existing development projects, most of which were sanctioned when the oil price was
higher than $100/bbl, will hold annual investment up to at least £5 billion in 2018 but the longer term trend
remains negative.
With most potential new developments requiring a break-even oil price in excess of $50/bbl, companies are
re-evaluating development concepts to achieve significant cost savings before committing to new projects. This
project slippage may present some upside on the forecast towards the end of the decade but only if market
conditions improve.
Figure 22: Capital Investment
0
2
4
6
8
10
12
14
16
2012
2013
2014
2015
2016
2017
2018
Capital Investment (£ Billion - 2015 Money)
Potential Upside from Projects yet to be Sanctioned
Committed Investment
Source: Oil & Gas UK
Figure 23 overleaf shows that only one new field has been approved so far in
2016 at the time of writing, with less than £100 million of fresh capital
committed to the basin. With few projects approaching sanction, it is possible
that there will be no further commitments to investment in greenfield
projects this year. This is set to be the worst year in the history of the UKCS
for new field approvals. Brownfield opportunities are also scarce with just
five addendums to field development plans sanctioned so far and few
expected for the rest of the year. This is compared with ten in 2015 and
28 in 2014.
Less than
£100 million of
fresh capital has
been committed
to the basin so
far this year.