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ACTIVITY SURVEY
2016
page 18
challenge in the current business environment. The newly established MER UK Forum replaces PILOT and the
Oil and Gas Industry Council, bringing together all key stakeholders. It has drawn up a focussed agenda to
help respond to the downturn. The MER UK Forum’s meetings coincide with those of the Fiscal Forum with
HM Treasury and are attended by relevant government ministers.
Industry took the lead in responding to the challenges it faced during 2015. A combination of cost reduction and
efficiency improvements have already delivered an effective response to the $50-60 world anticipated a year
ago, leading to unit cost reductions of 28 per cent and a production increase of 9.7 per cent. Figure 7 provides
a summary of the industry’s performance in 2015, including a comparison of outturn against the forecast given
12 months ago.
Figure 7: Industry Key Metrics Scorecard for 2015
2014 Actual
2015 Forecast
2015 Actual
Production (million boepd)
1.49
1.50
1.64
Operating Costs (£ billion)
9.7
8-10
8.2
Unit Operating Costs ($/boe)
29.30
26-27
20.95
Unit Operating Costs (£/boe)
17.80
16-17
13.70
Capital Investment (£ billion)
14.8
9.5-11
11.6
Exploration Wells Spudded
14
8-13
13
Appraisal Wells Spudded
18
<5
13
Source: Oil & Gas UK