British Oil and Gas Production Peaks for First Time in 15 Years

The UK oil and gas industry has enjoyed a positive start to the year, with the latest statistics showing that field production rose by 8.6% during the first 10 months of 2015. The spike is largely thanks to the opening up of North Sea fields. As a result, Britain’s production has increased for the first time in more than 15 years.

Industry body Oil & Gas UK was quick to publish the new figures, and assert that the 8.6% rise was higher than they’d initially predicted. That said, it has no illusions about the challenges that lie ahead in 2016. The group has warned that in the wake of oil prices plummeting to pre-financial crisis levels, maintaining the production spike will be difficult.

Production spikes in wake of North Sea ventures

Over the past 15 years Britain’s oil and gas output has been slashed by over 50%, with sources running low and investments failing to meet exploratory demand. As of late, ventures in the North Sea have led to the opening of new fields which has categorically boosted national output.

Deirdre Michie, Oil & Gas UK’s chief executive explains that the industry has enjoyed unprecedented growth thanks to the North Sea fields. “In February 2015 we predicted a marginal increase in production for 2015, but the industry-wide focus on improving production efficiency coupled with investments of more than £50bn over the last four years to bring new fields on stream across the last 12 months is paying off and yielding a better result,” she says.

Britain’s production comeback not black and white

Unfortunately growth is not eternal, with key producers such as Shell, Centrica and BP cutting investments and culling jobs as crude prices drop. While many of the North Sea fields were commissioned when oil was going at over US$100 a barrel, the US$40 a barrel slump has seriously shaken the UK industry.

“The fact is that the value of our product has more than halved,” said Deidre. “Times are really tough for this industry and for the people working in it. We will continue to see job losses as we move into 2016 and we must be thoughtful and supportive of our colleagues and their families who are being made redundant or who are at risk of being made redundant.”

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