Business Outlook 2018
BUSINESS OUTLOOK 2018
2. Key Performance Indicators
Forecast ‘18 Our outlook explained
‘14 ‘15 ‘16 ‘17
Year-On-Year % Change
Positive - A combination of production efficiency
517 571 598 598 620-640
Total Production (million barrels of oil equivalent)
improvements and new fields are driving production increases after 14 consecutive years of decline.
0% +11% +5% 0% +5%
Positive - All 12 of the new field start-ups in 2017 have a majority oil composition, which
311
352
371
368
395-405
Liquids Production (million barrels of oil equivalent)
is expected to support production growth over the next two years.
-1%
+13%
+5%
-1%
+9%
Positive - The start-up of Cygnus in late 2016 and depletion of cushion gas from the Rough storage facility are helping to maintain flat gas production in 2018.
206 220 228 230 225-235
Net Gas Production (million barrels of oil equivalent)
+1% +7% +4% +1% 0%
Positive - More than £5 billion of new capital projects could be approved this year, providing much needed new business for the supply chain.
8
5
2
2 12-16
New Field Approvals
-20% -38% -60% 0% +600%
Neutral - Fresh investment in 2018 could see capital expenditure increase for the first time in four years, despite the recent completion of a number of major projects and capital efficiency gains. Neutral - After a trend of poor project execution, operators have improved efficiency and are now routinely delivering projects on time and under budget. Neutral - A small increase in operating costs is likely this year as exploration and production companies look to carry out previously deferred activities and maximise opportunities to improve recovery rates. Neutral - Unit operating costs are set to remain flat in sterling terms this year, although a weaker dollar may result in a slight increase in dollar terms.
15 11.7 8.3 5.6
5.5-6.0
Capital Expenditure (£ billion) a
+3% -22% -29% -33% +3%
23.8 15.1 12.6 c
11.8 c
13-15
Unit Development Costs ($/barrel of oil equivalent) a,b
-22% -36% -16% -7% +19%
9.8 8.3
7
7
7-7.5
Operating Expenditure (£ billion) a
+7% -15%
-16%
0% +4%
29.6 21.0 15.2 15.2 15.8- 16.4 -1% +13% -29% -27% +6%
Unit Operating Costs ($/barrel of oil equivalent) a
6
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