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Russian Oil Revenues Soar Despite Sanctions

Russian Oil Revenues Soar Despite Sanctions

Despite suffering under a massive…

UK Oil Production Set For Decline

Crude oil production in the UK will decline this year to 940,000 bpd from last year’s 980,000 bpd, the Oil and Gas Authority said in a new report, adding that output will continue to decline in the next five years as well, reaching 760,000 bpd in 2024.

Capital expenditure in the period will also decline substantially, the energy industry authority said. This year, it is seen at US$6.76 billion (5.2 billion pounds), falling to US$4.55 billion (3.5 billion pounds) in 2021 and US$3.31 billion (2.55 billion pounds) in 2024.

Still, despite the negative trend, the Oil and Gas Authority has updated its long-term production projection to 2050. Now, the authority expects the cumulative output of oil and gas for the period between 2015 and 2050 to be 3.9 billion barrels of oil equivalent higher than it projected in March 2015 and 200 million barrels of oil equivalent higher than OGA’s September 2018 projection.

The increase in cumulative production will be the result of lower operating costs, which will combine with enhanced efficiency in oil and gas recovery in the North Sea, OGA said. New field development will also help this increase. In 2015-2050, according to these projections, the UK will have produced 11.9 billion barrels of oil and gas.

Interestingly enough, the decline in production will come just a year after output—including crude oil and natural gas liquids—hit a seven-year high of 1.09 million bpd, thanks, the OGA said, to the launch of 30 new fields since 2015 along with better asset integrity and more enhanced oil recovery projects at legacy fields.

Operating costs have been falling over the last three years but are on their way up. As of last year, these averaged US$15.07 (11.6 pounds) but are set to rise to US$15.98 (12.3 pounds) this year and reach US$16.76 (12.9 pounds) per barrel in 2024.

By Irina Slav for Oilprice.com

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