ECONOMIC REPORT 2013
19
Oil & Gas UK estimates that total expenditure
of £600-1,000 billion (in 2012 money) will be
required over the life of the UKCS, if recovery
is to reach the higher figures in the forecasts.
However, investment is not the only factor that
will influence the longevity of the UKCS. Whilst
sanctioned investments already guarantee
the industry will be active for another
15 to 20 years, the future to 2050 and beyond
is reliant on a number of determinants,
such as commodity prices, cost inflation,
rate of technical improvement, access to
infrastructure, fiscal policy, and supply chain
capacity and capability. As long as the UKCS
continues to be a competitive oil and gas
province in which to invest, Oil & Gas UK
believes that up to some 24 billion boe of
resources remain to be recovered (towards the
higher end of these various projections) and
the industry will be active beyond 2050.
Production
In 2012, 1.54 million boe per day (boepd)
were produced from the UKCS, 14.5 per cent
less than in 2011. This compares unfavourably
with an average annual reduction of about
nine per cent a year over the previous decade
(shown in figure 8).
Furthermore, the 14 per cent reduction in 2012
followed one of 19 per cent in 2011, resulting
in a 30 per cent reduction over the course of
the last two years and the lowest production
since 1977. Figure 9 illustrates how numerous
fields have contributed to this decline.
The 19 per cent decline during 2011 was
the largest recorded for the UKCS since
production peaked at the turn of the century,
with 230 fields accounting for a 542,000
boepd reduction. Many of these are natural
declines on account of ageing, but ten large
fields made up 37 per cent of the reduction:
of the ten, Buzzard, North Morecambe and
Figure 8: The UKCS – A Decade of Declining Production
Figure 9: Production Losses since 2010
(with the ten largest contributors highlighted by
more densely shaded bars in each column)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Oil and Gas Production (Million boepd)
-19.2%
-6.5%
-14.5%
-9.4%
-5.1%
-4.6%
-9.6%
-10.1%
-8.7%
Source:DECC/Oil&GasUK
230 fields
produced
less
in
2011 than they
did in 2010
93 fields
produced
more
in
2011 than they
did in 2010
239 fields
produced
less
in
2012 than they
did in 2011
82 fields
produced
more
in
2012 than they
did in 2011
Source:DECC, Oil&GasUK
Actual Production
0
2010
2011
2012
1.5
1.7
1.9
2.1
2.3
Million boepd
Source: DECC, Oil & Gas UK
Source: DECC, Oil & Gas UK
