ECONOMIC REPORT 2013
7
Security of Supply
• Currently, oil and gas provide some
73 per cent of the UK’s total primary
energy, with oil for transport and gas for
heating being dominant in these markets.
• In 2030, 70 per cent of primary energy
in the UK will still come from oil and
gas, according to the Department of
Energy and Climate Change’s (DECC)
latest projections.
• If the current rate of investment is
sustained, the UK’s Continental Shelf
(UKCS) has the potential to satisfy close to
50 per cent of the UK’s oil and gas demand
in 2020 (>50 per cent for oil, <50 per cent
for gas).
Economic Contribution
• Production of oil and gas boosted the
balance of payments by some £32 billion.
• The supply chain in the UK generated
more than £20 billion of sales from
the UKCS.
• Another £7 billion of supply chain sales
were in the export of goods and services.
• Offshore oil and gas remained the
largest investing sector and the largest
contributor to national gross value added
(GVA) among the industrial sectors of
the economy.
Oil and Gas Prices
• The price for Brent oil averaged $112 per
barrel, less than 50 cents higher than
2011’s average.
• The oil price peaked at $128 per barrel in
March 2012, before slipping to a minimum
of $89 per barrel at the end of June and
then recovering again.
• The day-ahead gas price at the National
Balancing Point (NBP) was relatively stable
throughout the year, averaging 60 pence
per therm, although it did spike to almost
£1 per therm on 7 February 2012 because
of supply constraints in mainland Europe
caused by extremely cold weather.
• The combined oil and gas price for UKCS
production was, on average, $89 per
barrel of oil equivalent (boe).
Production
• Production declined by 14.5 per cent from
2011 to 567 million boe, or 1.54 million
boe per day.
• TheUK remained the third largest producer
of gas, and second largest producer of oil
in Europe. The UK also remained in the
top 25 global producers of both oil (20th)
and gas (23rd) despite the sharp decline in
production over the last two years.
2. Industry at a Glance
The following summarises the key findings of Oil & Gas UK’s
Economic Report 2013
. Figures below
refer to 2012, unless otherwise stated.
