A report from the new Oil & Gas Authority issues a "call to action" to protect and sustain the UK oil and gas industry.
A report published Wednesday by the new Oil & Gas Authority (OGA) has issued a "call to action" in order to protect and sustain the UK's oil and gas industry.
The report – titled "Call to Action: The Oil and Gas Authority Commission 2015" and authored by Dr. Andy Samuel, the OGA's recently-appointed chief executive – said the decline in global oil prices "has only magnified the existing challenges for the UK Continental Shelf" as highlighted by trade body Oil & Gas UK's recent 2015 Activity Survey.
Published Tuesday, the 2015 Activity Survey found that of 3.7 billion barrels of oil equivalent (Bboe) of potential investment opportunities identified on the UKCS only 2 Bboe had been earmarked for development at the end of 2014. The survey also found that operating expenditure on the UKCS rose to a record high on a unit of production basis, while only 14 exploration wells out of an expected 25 were drilled on the UK Continental Shelf last year.
The OGA's report highlighted two key risks that it said required urgent focus:
The OGA noted that various reviews carried out by the Department of Energy and Climate Change and the HM Treasury has provided a "clear perspective" on key priorities that must be realized. These include:
The OGA also noted the actions recommended in last year's Wood Review.
In order to address the specific risk that profitability of producing fields will not be enough to attract continued investment, the OGA said that priority actions should include: the protection of critical infrastructure, significantly improved production efficiency and the creation of a competitive cost base for the industry.
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