Oil and Gas UK survey shows increase in investment

Capital investment in UK oil and gas exploration and production has increased by 60 per cent over the last two years, significantly slowing the rate of production decline from the UK continental shelf (UKCS), according to Oil and Gas UK’s latest Activity Survey.

The survey, which incorporates the latest exploration, investment, production and decommissioning data supplied by all the leading exploration and production companies operating in the UK, suggests that investment, which in 2009 was just less than £5bn, could increase this year to around £8bn at 2010 prices.

Provided all the development plans now being considered by companies come to fruition, annual investment could be sustained at this rate for the next five years.

This will have a significant impact on the country’s hydrocarbon production and could ultimately lead to the decline rate halving to around three per cent per annum to 2016, down from the basin’s yearly average decline of six to seven per cent over the past ten years.