FRENCH oil major Total is the latest energy company to announce moves to reduce its North Sea overheads.
It aims to cut one-fifth off the cost of its UK operations this year while looking to prolong the life of existing wells and drill new ones.
The company’s 2009 exploration and production budget in the declining oil and gas province is £1.2billion, according to Roland Festor, Total’s head of E&P in Britain. He said: “We need to cut operating costs by 20%.”
He also welcomed tax breaks in helping the company to manage the rising costs of renewing its reserves.
Total’s fields in the UK North Sea produced 213,000 barrels of oil equivalent per day in 2008, two-thirds of it gas.
The figure was about 9% of the group’s output. About 82% of Total’s North Sea output comes from the Alwyn and Elgin-Franklin fields.
West of Shetland, Total is developing the Laggan-Tormore gas fields, which could start production in 2014.
Oil rose to a six-month high above $66 a barrel yesterday, heading for its largest monthly percentage gain in more than a decade, after American, Japanese and Indian data suggested that the global economic downturn may be easing.
US crude oil for July delivery settled up $1.23 at $66.31 a barrel after reaching a peak of $66.47, the highest since early November last year. In London, Brent crude added $1.13 at $65.52.
The US dollar hit a five-month low against a basket of other currencies, helping to support prices.
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