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Page added on February 25, 2015

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North Sea Oil Production Continues to Slide

Production

Oil production in the British section of the North Sea declined in 2014 amid rising costs, high taxes and low oil prices , underscoring the need for more investment and exploration there, an industry association said Tuesday. The report by Oil & Gas U.K., a lobbying group, comes as the oil industry has stepped up pressure on the U.K. government to cut taxes and streamline the complex regime for the oil and gas sector in its March budget amid the North Sea’s decline. British North Sea production fell by 1.1% in 2014 compared with the previous year to 1.42 million barrels of oil equivalent a day, the report said.

wsj.com



11 Comments on "North Sea Oil Production Continues to Slide"

  1. forbin on Wed, 25th Feb 2015 8:54 am 

    somehow I doubt that cutting all the taxes to zero will bring back the peak oil production of 1998/9

    might save few jobs though , and I believe this is crude oil of API 45 and not a lot of condensate, we’ll leave that to the Americans !

    Forbin

  2. OFT on Wed, 25th Feb 2015 10:22 am 

    A drop of 1.1% hardy constitutes a ‘slide’ in my lexicon. The latest government stats I see show production through to October 2014, and – as expected – production flattened out in the last year. However, these figures predate the recent price drop, and the spate of cuts to jobs and investment will work its way through the system in due course.

    This article is the PR work of a lobbying group and the aim is to push for tax cuts for this industry as part of the annual UK budget, which is announced in March 2015.

    Mature fields in the UK are taxed at about 69%, which is high by international standards. In addition, drilling costs are not tax deductable.

  3. Plantagenet on Wed, 25th Feb 2015 12:30 pm 

    As North Sea oil production declines, the appeal of fracking oil shales will grow in the UK.

  4. mike on Wed, 25th Feb 2015 1:19 pm 

    “As North Sea oil production declines, the appeal of fracking oil shales will grow in the UK”. so our blogger Plantagenet (who for some strange reason has chosen to adopt the French name of the dynasty that ruled England for three hundred years – including incompetent John who was forced to sign Magna Carta, Richard I who slaughtered Muslims and then got kidnapped and had to pay a fat ransome, Henry II who murdered the achbishop of Canterbury, Edward ll who had a red hot poker shoved up his arse, Richard II who was murdered by Henry IV, Henry VI went mad and got murdered, Edward V was kidnapped and got murdered, Henry V who plundered France, and Richard III who was slain in battle after murdering the boy king Edward V ). Any road, the appeal of fracking in the UK will be strictly confined to the likes of Cameron and Osborne who imagine vast wealth accruing to Britain in the same way as it supposedly has in the US, and vast almost infinite reserves of gas – enough to provide energy independence for the rest of the century. Meantime, wherever and whenever in the UK test drilling has been started, there has been a public outcry and concerns abouyt despoilation of the landscape, great increases in hgv traffic, threats to public health, pollution of the environment, and all the profits going to fat cat companies rather than the local people under whose land the fracking supposedly will take place and who do not own the mineral rights so won’t get a penny while they see their house prices plummet anr their home territory turned into a methane farting pin cushion. Cameron knows sweet F.A. about geology and the short life span of fracked wells. He does not know that the underlying rock from which the gas is supposedly to come is probably as costly to exploit as the failed shale gas and oil rocks in Poland. No Monsieur Plantagenet (which of those kings above is your role model I wonder)you seem to know as much about public feeling in this country (UK) as king John who signed the Magna Carta and died a year later.

  5. Northwest Resident on Wed, 25th Feb 2015 2:12 pm 

    mike — Planter is one of the “big thinkers” on this forum. You may have noticed.

    I personally think that fracking in the UK is a fantastic idea, just like Planter. Why shouldn’t folks in the UK be forced to suffer the toxicity, the noise, the devalued property values, the land and water wastage, the boom and bust, the excessive unpayable debt and the vast “glut” of practically useless “oil” that fracking produces — same as the exceptional folks in the U.S.A. I think it is a brilliant idea, actually, and I’m sure that “Big Thinker” Plantagenet agrees. Why, in fact, it was just a couple of months or so ago that he was saying that fracking would really start taking off in Argentina any time now, and look at how well Plant has done with that splendid prediction. No doubt, when it comes to fracking and all things oil related, Plant (aka: “the glutster”) really knows his stuff. (cough, hack)

  6. Davy on Wed, 25th Feb 2015 2:35 pm 

    Mike, come on, and give credit where credit is due. Is it not true that the Planter went to Gibraltar a month ago and reported here on our very own PO site that there was an oil glut? He verified that by seeing 8-11 oil tankers. This was unquestionable physical spoof of an excess of supply proving that we have an oil glut. IMA that the Planter has indicated that prices are low because of this oil glut. Planter also gives and excellent explanation for the future of oil prices. Planter has report they will go up when this excess supply is used up. There you have it Mike. Planter has shown he knows the ropes with gluts surely he knows about fracking in the UK.

  7. Energy Investor on Wed, 25th Feb 2015 3:05 pm 

    Much of the production is gas. It masks the true drop in oil production methinks.

  8. Speculawyer on Wed, 25th Feb 2015 9:11 pm 

    Yeah, I suspect some of the North Sea decline is now intentional like the Bakken decline. It is just not worth drilling for at these prices. But they’ll be back drilling when the price goes above $100.

  9. GregT on Wed, 25th Feb 2015 10:34 pm 

    “But they’ll be back drilling when the price goes above $100.”

    I seriously wonder how some people can walk, and chew gum at the same time.

    Do you honestly not understand what you are saying Spec?

  10. OFT on Thu, 26th Feb 2015 4:49 am 

    “The appeal of fracking will grow”

    Both sides of the argument will be correct, depending upon who you ask! Politicians and some parts of industry, will continue to call for fracking to develop in the UK. Politicians to gain votes, industry to gain loans from banks ( A 3 year campaign is plenty long enough for an OilCo. CEO to make a lot of money – even if they don’t produce a lot of product.)

    Ultimately the effort will struggle, for the reasons outlined by Mike. No mineral rights for disgruntled land owners, popular objections and protests to the environmental impacts and (probably) the lack of commercial resources in the current price climate.

    The North Sea is different. Offshore development typically requires longer planning cycles, more complex logistics, reliance on tie-in production options, and is dependent on market stability (both the commodity price on the market and government tax regimes).

    I expect the current government will make ‘bullish’ concessions to the oil industry in the March 18th budget for both onshore fracking planning and for offshore tax breaks. They have an election to try and win in May, after all!

  11. Kenz300 on Thu, 26th Feb 2015 12:16 pm 

    Time is running out……. when will Britain transition to safer, cleaner and cheaper alternative energy sources?

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