ECONOMIC REPORT 2013
20
Brent had lengthy maintenance shutdowns,
Goldeneye ceased production in preparation
for its role in a carbon capture and storage
project, Rhum had been shut for geopolitical
reasons (and remains so) and Gryphon’s
floating production, storage and offloading
(FPSO) vessel had to undergo substantial
repairs following damage in bad weather.
Fortunately, 93 fields increased their output
relative to 2010, which meant that the net
decline for 2011 was 413,000 boepd.
In 2012, 239 fields produced 470,000 boepd
less than in 2011. This decline was dominated
by ten fields which eclipsed the positive
contributions made by the 82 fields that
increased their output. A gas leak at Elgin in the
central North Sea (CNS) during March and the
subsequent closure of the SEAL pipeline had a
substantial effect on production for the year;
the seven fields feeding into the SEAL pipeline,
including Shearwater, produced 126,000
boepd less than in 2011, or 41 per cent of the
net decline between 2011 and 2012.
The fields that increased production were a
mixture of existing and new ones. Nine fields
started production in 2012, although with
relatively modest total reserves of 146 million
boe. These included Islay, Wingate, Bacchus
and Devenick, but their impact was too small
to offset the decline from existing fields. This
offsetting effect would have been larger had
the dates for the start of production not been
later than anticipated for some fields. The
likely reasons underlying the limited reserves
brought on-stream in 2012 are the poor results
from exploration drilling in recent years and
an unexpected tax increase in 2006, with its
adverse effects on investment.
Some key fields, such as Buzzard, emerged
from lengthy, planned maintenance periods
and provided a timely boost to production
in 2012. Meanwhile, the Sean gas field
increased its output as it came to the end of
its production contract which had previously
kept it in a reserve role.
In 2013, there are 15 fields anticipated to
come on-stream (with combined reserves of
470 million boe). As Oil & Gas UK forecast in
February, production in 2013 has continued
to decline and, using the latest available data
(to the end of May), the indications are that it
is towards the bottom of our predicted range,
namely 1.4 million boepd. If this rate were
maintained for the rest of the year, production
would be 8.5 per cent lower than in 2012.
However, maintenance is concentrated in the
summer months and so, although the decline
will be offset in part by the return to production
of the Elgin and Franklin fields and Banff
and Gryphon FPSOs and by new production
coming on-stream, notably the Jasmine field in
the fourth quarter of the year, Oil & Gas UK’s
updated forecast is for production to be in
the range of 1.2 to 1.4 million boepd for 2013
overall (see figure 10 opposite).
