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Geographically, Figure 41 shows that dry gas production
in the SNS region is typically much less expensive
(£12-13/boe) than in other areas of the UKCS. This is
despite the maturity of the region, with many fields in
the fourth decade of operation and close to the end of
their productive lives. This reflects the simpler technical
nature of the developments and the discounted sale
price of gas when compared to oil.
Fields in the NNS area, on average, will experience
UOCs twice those of the SNS, with aging infrastructure,
redundant facilities and a shortage of fuel gas
contributing to the disparity. In contrast, in the CNS, the
UKCS’ most productive region and where around one
quarter of production is gas, UOCs have been very close
to the UKCS mean average for the last ten years.
It is interesting to note that the gap between the unit
costs of operating liquids and gas fields on the UKCS
was previously much smaller (see Figure 42 opposite).
The costs of operating liquid production were generally
around 20 per cent higher than gas in the period prior
to 2010, before production fell sharply, driving UOCs
higher for both. However, there was a much greater
decline in liquids production, which has led to a
40 per cent cost premium associated with producing
liquids compared to dry gas, on a unit basis, in 2015.
0
5
10
15
20
25
30
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Unit Operating Costs (£/boe)
Southern North Sea and Irish Sea
Central North Sea
Northern North Sea
Source: Oil & Gas UK
Figure 41: Regional Average Unit Operating Costs