How Did UKCS Oil and Gas Perform in 2020?

Carbon dioxide (CO2) emissions from offshore installations and terminals in the UK Continental Shelf (UKCS) decreased by ten percent last year, according to the UK Oil and Gas Authority’s (OGA) latest UK Stewardship Survey.

The decrease in volumes of carbon dioxide emitted related to a decline in production, but was also significantly driven by emissions reduction by operators, the report showed. The resulting carbon dioxide intensity of offshore production fell from 21.2 kgCO2 per barrel of oil equivalent (boe) in 2019 to 20.2 kgCO2/boe in 2020, the report highlighted.

Production efficiency (PE) was sustained at the OGA’s target of 80 percent last year, the report outlined. UKCS PE hit this figure in 2019 after jumping up from a PE of 75 percent in 2018. UKCS PE was as low as 60 percent back in 2012, the report showed. In 2020, UKCS wellhead production hit 610 million boe out of a potential 760 million boe, according to the report. In 2019, UKCS wellhead production stood at 640 million boe from a potential 800 million boe.

Just eight exploration and appraisal wells were drilled in the UKCS last year, the report pointed out. This was the lowest exploration activity in the last eight years, with seven targets drilled resulting in five discoveries, and culminating in 212 million barrels of oil equivalent resources. Sixty-one development wells were said to have been completed in 2020, which is 14 less than in 2019.

The report highlighted that the twin effects of Covid restrictions and the delayed maintenance of the Forties Pipeline System resulted in a significant increase in deferred planned shutdown days. This number amounted to 716 last year, compared to 113 the year before and 98 in 2018.

Effects of the pandemic on operations are said to have led to a drop in operating expenses across the basin. Average unit operating costs (UOC) for the basin fell to $1.57 (GBP 11.1) per barrel, which is $1.41 (GBP 1) less per barrel than in 2019. This figure is forecasted to rebound in the next few years, however, exceeding the upper limit of the OGA UOC benchmark boundary by 2023.

“Against the backdrop of a very difficult year, industry did well to maintain positive performance within the basin,” Scott Robertson, the director of operations at the OGA, said in an organization statement.

“2020 was certainly a unique year for the UKCS and a lot of activity was delayed or deferred during this period due to the impact of the combination of Covid restrictions and low oil and gas prices,” he added.

“In the year ahead it will be important for industry to maintain this level of performance as activity ramps up, both in traditional oil and gas activity as well as the net zero and energy transition opportunities our basin offers,” Robertson went on to say.

The OGA’s 2020 UKCS Stewardship Survey closed on February 26. Seventy-eight operators contributed to nine industry themes and over 3,880 data sections.

To contact the author, email andreas.exarheas@rigzone.com