Oil & Gas UK Economic Report 2015

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ECONOMIC REPORT 2015 58
7.7 Production
Provisional data from DECC for the first six months of
2015 shows production to have increased by around
three per cent against the same period last year, with
initial indications suggesting that production could
increase this year for the first time in 15 years. After
poor delivery in February, as some key assets were
shut-in for all or part of the month, production for
the second quarter of the year looks particularly
encouraging and early figures suggest that May saw the
best overall monthly output since March 2012.
Production from the large Golden Eagle field, which
only came on-stream in November 2014, has helped
crude oil production increase over the first half of this
year as well as strong delivery from existing assets
(see Section 8 for a case study on the Golden Eagle
Area Development). Although natural gas liquids (NGL)
production has fallen by around nine per cent, total
liquids production is up by around three per cent for the
year, as is net gas production.
While annual production performance for 2015 is
still uncertain and will only become clearer after the
summer maintenance season, some sizeable new
start-ups are anticipated over the second half of
this year. Consequently, Oil & Gas UK believes that
production is likely to be no worse than last year
and, if fields such as Solan and Laggan Tormore come
on-stream, this may lead to a production increase of
around three or four per cent.
The positive production performance reported
so far this year follows on from 2014, when total
annual production averaged 1.49 million boe per day
(in total 545 million boe)24, just 0.2 per cent less
than in 2013 and representing the best year-on-year
performance in 15 years. Many existing assets were
able to slow their reservoir decline rates and reported
improved production efficiency, plus new start-ups
(Juliet, Kew, Golden Eagle and Kinnoull) supplemented
production from existing fields. Performance over
the last 18 months indicates that production may be
beginning to turn around after particularly poor delivery
from 2011 to 2013.
Net gas production was up 1.5 per cent last year on
2013, helped by a full year of production from the
Jasmine field. Liquids production provided around
60 per cent of the total and was down by 1.4 per cent.
This is still the best annual performance since 2000, but
was not helped by the delay in a number of new field
start-ups.
24 Oil & Gas UK has revised the way it converts gas production from volume units to barrels of oil equivalent based on new data published by DECC.
While the production trends are only nominally affected, the new data show that in previous years Oil & Gas UK was being overly-conservative
in the conversion from gas to oil. This results in the net gas production estimates being upwardly revised for both our historical and forecast
production figures (the revisions are typically around five per cent but vary depending on the calorific value of the gas produced in each year).
0
20
40
60
80
100
120
140
Jan-05Jul-05Jan-06Jul-06Jan-07Jul-07Jan-08Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15
Production (Million boe)
Source: DECC, DUKES
Figure 43: Monthly Production Performance