21 August 2013 17:09 [Source: ICIS news]
LONDON (ICIS)--North Sea oil and gas production could decline by 8.5% in 2013 from 2012 levels due to operational difficulties caused by ageing infrastructure, an industry body warned on Wednesday.
The decline is expected to follow a record 30% reduction over the last two years (2011-2012), and add to the lowest production levels seen since 1977, Oil and Gas UK said.
Production declined by 14.5% year on year to 1.54m boe (barrel of oil equivalent) per day in 2012, after falling 19.0% in 2011.
However, Oil and Gas UK predicts total investment to hit an all-time record of £13.5bn (€15.7bn, $20.9bn) this year.
Malcolm Webb, chief executive of Oil and Gas UK, said: "There is indeed much more that needs to be done. Despite impressive investment in new developments, the production efficiency of existing assets has been in worrying decline, with a number of fields failing to produce as expected."
Production efficiency - the ratio of actual production to the maximum potential - dropped to 63% in 2011, with a further fall to about 60% expected in 2012 when all data becomes available.
Average production efficiency of the UK Continental Shelf was in the high 70s% just four years ago and around 80% seven to eight years ago. The recent decline has resulted from extended maintenance shutdowns and several unexpected major production outages.
The industry has three main goals in the coming years, the trade body said, including continuing oil and gas exploration, hiking the recovery rate from existing fields, and conducting operations in an environmentally safe manner.
UK remains the third largest producer of gas, and second largest producer of oil in Europe.
($1 = €0.75, €1 = £0.86)
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