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ECONOMIC REPORT 2015
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Energy Supply
• Oil and gas provided 68 per cent of the UK’s total
primary energy in 2014, with oil for transport and gas
for heating being dominant in these markets.
• In 2030, 70 per cent of the UK’s total primary energy
is expected to come from oil and gas, according to the
Department of Energy & Climate Change (DECC).
• The UK Continental Shelf (UKCS) continues to satisfy
just over 50 per cent of the UK’s oil and gas demand.
Import levels are expected to rise to 74 per cent
by 2030.
Oil and Gas Prices (money of the day)
• The price for Brent oil averaged $99 per barrel (bbl)
in 2014, lower than the nominal averages of $109 in
2013, $112 in 2012 and $111 in 2011.
• The price for Brent oil averaged $76/bbl in the fourth
quarter of 2014 as the price fell rapidly from a peak of
$110/bbl in June.
• Over the first six months of 2015, the price for Brent
oil averaged $58/bbl.
• The month-ahead gas price at the National Balancing
Point fell to an average of 51 pence per therm (p/th)
over 2014 and has averaged 46 p/th over the first six
months of 2015.
Economic Contribution
• The supply chain in the UK generated over £39 billion
of sales in 2013 with similar figures estimated for 2014.
These supply chain sales included over £16 billion of
export of goods and services (in 2013).
• Offshore oil and gas extraction, last year, was the
sixth largest contributor to national gross value
added among the 37 production, manufacturing and
construction sectors in the UK economy.
• Production of oil and gas boosted the balance of
payments by £25.2 billion in 2014.
• The industry paid £2.2 billion in corporate taxes on
production in 2014-15, the lowest in over 20 years
because of falls in oil price and as a consequence of
recent investments.
• Since 1970, the industry has paid over £330 billion in
such taxes.
Employment
• It is estimated that the UKCS currently supports
around 375,000 jobs
1
, most of which are highly skilled
and well paid.
• This reflects an estimated 15 per cent contraction in
employment since its peak at around 440,000 at the
start of 2014.
• Cost reductions and efficiency improvements are
key to ensuring the UKCS attracts fresh investment
over the remainder of this decade, which is critical to
future employment prospects of the basin.
2. Industry at a Glance
The following summarises the key ndings of Oil & Gas UK’s
Economic Report 2015
. Figures are given in 2014 money
unless otherwise stated.
1
This number reflects direct, indirect and induced employment.
Direct employment
– those employed by companies operating in the extraction of oil and gas and associated services.
Indirect employment
– employment as a result of supply chain effects caused by oil and gas sector activity. For these
companies, extraction of oil and gas and associated services will be one part of a wider business.
Induced employment
– employment supported by the redistribution of income from the oil and gas sector.
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