Business Outlook 2018
BUSINESS OUTLOOK 2018
Operating Expenditure Following a period of intense cost reduction between 2014-16, operational expenditure stabilised at £7 billion in 2017 in line with expectations. This signals that, in general, the period of greatest cost pressure looks to have come to an end and E&P companies are now increasingly focused on sustaining significant improvements in the cost base that have been seen since 2014.
Figure 19: Operating Expenditure
Operating Cost Forecast
Operating Expenditure (£ Billion - 2017 Money)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: OGA, Oil & Gas UK
The hard work to reduce costs and increase output from the UKCS in recent years has led to unit operating costs (UOCs) falling by 50 per cent, on average, from almost $30/boe in 2014 to $15/boe in 2017. These improvements are greater than in any comparable offshore producing region 8 and have been vital in returning the basin to a position where it can compete internationally for investment.
8 See Oil & Gas UK’s Economic Report 2017 at www.oilandgasuk.co.uk/economicreport
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