North Sea oil operators’ surging costs risk scaring away the more than £1trillion ($1.6trillion) of investment needed to meet their production goals, according to industry lobby Oil & Gas UK.
The country needs that investment if it hopes to recover the equivalent of more than 20 billion barrels of oil, it said today in a statement. Production has dropped 40% in the past three years as fields mature, while unit operating costs are about 60% higher than as recently as 2011.
“The UK has to compete for each and every pound of that investment,” Malcolm Webb, chief executive officer of the industry group, said today in the statement. “If the current trend of rising cost continues, the UK Continental Shelf will cease to provide a healthy return on investment.”
A review by Ian Wood, former head of engineering company John Wood Group Plc, this year estimated there were 12 billion to 24 billion barrels yet to be extracted from the North Sea.
A review by Ian Wood, former head of engineering company John Wood Group Plc, this year estimated there were 12 billion to 24 billion barrels yet to be extracted from the North Sea.
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