ENER-G has welcomed an increase in UK oil and gas production, as reported by Oil and Gas UK in its recent annual Economic Report.
The report, which details the current and forecast status of the oil and gas industry in the UK, showed a welcome 1% increase in production in the first half of 2014 compared with the same period in 2013. This follows several years of double digit decline.
The report states that the UK Continental Shelf (UKCS) is reaping the benefits of record investment (£14.4 billion in 2013 and an expected £13 billion for 2014), and the return of significant fields back into production.
However, unit operating costs have increased since 2011 by around 60 percent; suggesting a call for action in each part of the industry to address these rising costs to give sustainability to the future of the UK gas and oil industry.
The report shows oil and gas provides around 70 percent of the total primary energy in the UK and almost 50% of this is supplied by UK offshore areas.
A huge challenge highlighted by the report is production efficiency, which has dropped from 80% in 2004 to 60% in 2014. Combined with low exploration success compared with previous years, the UK gas and oil industry needs to take action to secure energy for the nation.
Oil and Gas UK’s chief executive Malcolm Webb said “This report reaffirms our sector’s position as the country’s largest industrial investor, supporter of some 450,000 jobs, successful exporter of oilfield goods and services, and a provider of secure primary energy for the UK.
“However, to support a lasting and sustainable future, today we’re calling for greater collaboration – between governments, between government and industry and within industry itself to face and fight the challenges ahead. …. Far-sighted changes to the fiscal regime, are needed in the next 12 to 18 months to stimulate new investment in exploration and production. Alongside this, the industry must improve its efficiency and reduce its costs as a matter of utmost urgency.”
ENER-G Procurement is an independent energy purchasing specialist and a founding member of the Utilities Intermediaries Association (UIA). ENER-G publishes free energy market intelligence reports to keep UK businesses informed on energy market prices.
Further information: www.energ.co.uk/procurement