ACTIVITY SURVEY
2016
page 22
Capital Investment in 2015
Capital investment fell by 22 per cent last year as some big capital projects reached completion and fewer
greenfield or brownfield developments were undertaken in difficult market conditions. Oil & Gas UK predicted
this fall last year, although, at £11.6 billion, capital investment for 2015 came in just above the forecast range.
The main factors that drove the higher than anticipated figure were:
• The sanction of greenfield projects (Culzean, the Glenlivet–Edradour development, the Scolty–Crathes
development) and significant brownfield investment in the Eastern Trough Area Project (ETAP). Fresh capital
sanctioned in greenfield developments last year totalled £4.4 billion with a further £670 million in the ETAP
area
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. However, it is worth noting that only £0.5 billion of this investment was actually spent last year, the
remainder will be spent over the next five years as the projects are developed.
• Further slippage and cost overruns of major projects that were expected to start production in 2015.
• A longer than anticipated time-lag between global capital cost deflation and the impact of this on capital projects
on the UKCS.
• More capital than anticipated invested in UKCS infrastructure.
The majority of capital invested last year was spent developing new projects that were approved prior to the start
of 2015. Investment in existing assets accounted for over one third of the total spent last year, most of which was
essential to maintain production.
Figure 11: Capital Investment by Activity Type
Capital Invested in Projects
Sanctioned prior to 2015
Capital Invested in Projects
Sanctioned within 2015
Capital Invested in Existing Assets
Capital Invested in Pre-Sanction
Projects
£4.6 billion
£6.1 billion
£0.5 billion
£0.4 billion
Source: Oil & Gas UK
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http://bit.ly/BP-ETAP