OGA: UK Oil, Gas Industry CAPEX Will Keep Falling Over Next Half Decade
Capital expenditure (CAPEX) in the UK oil and gas industry will keep falling over the next half decade, according to the latest projections from the Oil and Gas Authority (OGA).
The OGA forecasts that CAPEX within the sector will drop to $7.72 billion (GBP 5.60 billion) in 2018, from $7.73 billion (GBP 5.61 billion) in 2017, before declining to $6.8 billion (GBP 5 billion) in 2019, $6.2 billion (GBP 4.50 billion) in 2020, $5.51 billion (GBP 4 billion) in 2021, $4.82 billion (GBP 3.50 billion) in 2022, and $4.13 billion (GBP 3 billion) in 2023. CAPEX in the region was $21.3 billion (GBP 15.45 billion) in 2014, $16.79 billion (GBP 12.17 billion) in 2015, and $11.91 billion (GBP 8.63 billion) in 2016.
Decommissioning costs are expected to plateau at $2.48 billion (GBP 1.80 billion) per year from 2018-2023, according to the OGA. These costs were at $1.73 billion (GBP 1.26 billion) in 2017, $1.69 billion (GBP 1.23 billion) in 2016, $1.54 billion (GBP 1.12 billion) in 2015, and $2.44 billion (GBP 1.77 billion) in 2014.
UK production is projected to rise to 1.68 million barrels of oil equivalent (boe) per day in 2018, up from 1.63 million in 2017. The OGA expects this figure to drop to 1.64 million in 2019, 1.60 million in 2020, 1.52 million in 2021, 1.45 million in 2022, and 1.38 million in 2023. Over the period 2016-2050, UK oil and gas production is projected to total 11.7 billion boe.
“2017 continued to be a productive year and production levels are set to rise in 2018 as more new fields come on-line,” the OGA’s chief executive, Andy Samuel, said in an organization statement.
“The OGA continues to work in partnership with industry and government in maximizing the economic recovery of our resources and in pursuit of the considerable prize highlighted by Vision 2035,” he added.
According to the OGA’s website, the purpose of Vision 2035 is to:
- Provide direction and instill confidence
- Inspire transformation and drive collaboration
- Create competitive advantage
- Secure investment and drive value
The OGA’s role is to regulate, influence and promote the UK oil and gas industry in order to maximize the economic recovery of the country’s oil and gas resources.
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