Government statistics indicate UK North Sea oil and natural gas production rose for the first time in more than 15 years despite slumping oil prices, said Oil & Gas UK, whose members include oil and gas producers and contractors.
Deirdre Michie, OGUK chief executive, warned that industry will be hard pressed to sustain that rate of increasing production in 2016 and beyond. Brent crude oil prices dropped to about $36/bbl during late 2015.
“Government data for the first 10 months of 2015 shows that the total volume of oil and gas produced on the UK Continental Shelf was up 8.6% compared with 2014, with the production of liquids up 10.6% and gas up 6.1%,” Michie said, citing figures from the UK Department of Energy and Climate Change.
“Output in November and December tends historically to be more stable, but even so, [OGUK] now expects yearend production for the full year of 2015 to be 7-8% higher than last year,” Michie said Jan. 4.
During February 2015, OGUK forecast a marginal production increase for 2015. The unexpectedly high production growth was attributed to producers becoming more efficient and having invested more than $50 billion during the last 4 years, which resulted in new fields coming on stream.
“The upturn underlines the industry’s commitment to the UKCS—which still holds great promise for the future and is vital for the country’s security of supply,” he said. “Times are really tough for this industry and for the people working in it. We will continue to see job losses as we move into 2016.”
For 2016, Michie said industry will continue to ensure an efficient base that attracts investment.
He said industry also seeks to trim drilling costs to ensure the North Sea remains globally competitive.