North Sea recovery: Oil at highest peak in five years

diana raicu
Posted: 09/15/2017

Oil and gas production in UK waters is back to 2011-12 levels

The value of oil produced on the UK continental shelf has increased by 15 per cent in the past year to £17.5bn ($23.8bn) according to official figures released by the Scottish government.

Scottish production – which accounts for 96 per cent of the UK’s oil and 63 per cent of its natural gas – increased by 2.9 per cent to 74.7m tonnes of oil equivalent in 2016-17.

In the same time period, capital expenditure on offshore developments dropped to £8bn from £10bn in 2015-16.

rig scotland
The reason for the change in Britain’s oil fortunes is based on increased production rates and the rise in the spot price of crude in recent months.

This week, Brent crude hit its highest levels since April at $55.74 per barrel, after an announcement of diminishing oversupply by the International Energy Agency.

“Scotland’s oil and gas industry has a bright future, and it is encouraging to see this continued increase in production which has risen by a total of 25 per cent over the last two years.”

Cautious optimism

Commenting on the numbers, Scottish energy minister, Paul Wheelhouse, said: “These figures show that confidence is continuing to return to the sector after a number of challenging years.

“Scotland’s oil and gas industry has a bright future, and it is encouraging to see this continued increase in production which has risen by a total of 25 per cent over the last two years.”

Amid the buoyant mood, Professor of petroleum economics at Aberdeen University, Alex Kemp, urged caution.

Speaking to Energy Voice, Professor Kemp said: “We had a big boom from 2009 to 2014 and we’ve got some of the fruits of that.

“In a couple of years, production will actually start coming down again and investment will also be declining so it’s a mixed picture at the moment.”

diana raicu
Posted: 09/15/2017