UK production rose more than 7% in 2015, Oil & Gas UK predicts

LONDON -- Oil & Gas UK’s chief executive, Deirdre Michie, has welcomed confirmation of the UK’s first rise in oil and gas production for over 15 years, but warned that the industry will be extremely challenged to sustain this into 2016 and beyond.

“Government data for the first ten months of 2015 shows that the total volume of oil and gas produced on the UK Continental Shelf (UKCS) was up 8.6% compared with 2014, with the production of liquids up 10.6% and gas up 6.1%," Michie said. “Output in November and December tends historically to be more stable, but even so, Oil & Gas UK now expects year end production for the full year of 2015 to be 7-8% higher than last year.”

“Given the difficulties being faced by the industry, this is welcome news. 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 £50 billion over the last four years to bring new fields on stream across the last twelve months is paying off and yielding a better result.”

Reflecting, however, on the challenges of producing in a lower for longer oil price world, Michie said, “While the UK offshore oil and gas industry is having to adapt to the low oil price and driving greater efficiencies throughout its operations, the fact is that the value of our product has more than halved. 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.”

“As we go through these times, we have to be resilient and focus on what we need to do to get us through the coming months to ensure an enduring industry for the future,” she added.