LONDON (Thomson Financial) - Oil and gas production in Britain is expected
to fall to anywhere between 2.6 million and 2.7 million barrels of oil
equivalent per day in 2008 from 2.8 million boepd last year, according to a
report published by Oil & Gas UK, the trade body for the country's offshore oil
and gas industry.
"Whilst domestic production declined by 4 percent in 2007, it still
satisfied 75 percent of the UK's gas consumption last year and meant that the
country was self-sufficient in oil," it said.
Production is forecast to drop only slightly in 2008 as several large
projects reach full production but "on current trends, the production decline is
expected to average 5 percent over the next five years," it added.
The industry spent 12.4 billion pounds in 2007 on field exploration,
development and production, unchanged from the previous year's level. However,
investments aimed at bringing new reserves into production fell to 4.9 billion
pounds in 2007 from 5.5 billion pounds in 2006.
"Significant cost inflation means that this capital is only a third as
efficient as five years ago, resulting in fewer new reserves being brought into
production," the report said, noting that the cost of developing a barrel of oil
or gas in the UK Continental Shelf has already jumped five-fold while operating
cost per barrel has doubled amid soaring energy prices in the world market.
Companies plan to invest around 21 billion pounds over the next five years,
targeting around 2.7 billion boe of potential developments in addition to the
7.1 billion boe which are currently on stream, it said.
monicca.egoy@thomsonreuters.com
mbe/rfw
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