ECONOMIC REPORT 2013
8
Total Expenditure (in 2012 money)
• Total expenditure on the UKCS was over
£20 billion for the first time in its history.
• Since 1970, the industry has spent over
£500 billion by:
o
Investing £317 billion in exploration
drilling and field developments
o
Spending £183 billion on production
operations
o
Spending£2billionondecommissioning
assets that have ceased production
Taxation
• The industrypaid£6.5billion incorporation
taxes on production in 2012-13.
• Whilst subdued production and record
investment have driven tax revenues
down in the short-term, the contribution
from oil and gas production was still over
15 per cent of the Exchequer’s total
receipts of corporation tax.
• The wider oil and gas supply chain is
estimated to have paid an additional
£5 billion in corporation and payroll taxes.
Capital Investment on Developments
• Capital investment reached £11.4 billion
as the development of a number of large
projects continued and other smaller
opportunities were incentivised by
field allowances.
• Oil & Gas UK predicts that capital
investment will reach a record of
£13.5 billion in 2013.
• Over 2011 and 2012, 45 projects have
been approved by DECC which require
capital expenditure of the order of
£22 billion, yielding over two billion boe of
production over time.
• Total capital investment committed to
projects already in production or under
development totalled £44 billion at the
start of 2013, £13 billion higher than
12 months earlier.
Operating Costs
• Total operating expenditure was ten per
cent higher than in 2011, at £7.7 billion.
• Unit operating costs continued to rise to
an average of £13.50 ($21.50) per barrel as
production continued to fall and spending
on asset integrity and rejuvenation
increased.
Reserves
• Almost 42 billion boe has been recovered
from the UKCS so far.
• Further overall recovery is forecast to be
in the range of 15 to 24 billion boe.
• Considering the full range of opportunities
available, current investment plans have
the potential to deliver 11.4 billion boe in
total, as follows:
o
7.4 billion boe from existing fields or
those currently under development
o
Four billion boe from incremental
and new field developments (not yet
approved)
• Total expenditure of up to £1,000 billion
(in 2012 money) will be required over the
remaining life of the UKCS, if recovery is to
reach the upper end of the forecast.
