• STV
  • MySTV

North Sea oil and gas output set to grow in 2018 

Oil and Gas UK has warned low levels of drilling mean the future outlook is 'uncertain'.

Oil: The number of jobs supported by the industry fell from 315,000 in 2016 to 300,000 last year.
Oil: The number of jobs supported by the industry fell from 315,000 in 2016 to 300,000 last year.

Oil and gas production in the North Sea is forecast to grow by 5% in 2018 but low levels of drilling mean the outlook for future years is "much more uncertain".

The industry body Oil and Gas UK published its latest Business Outlook report, showing production this year could rise to the equivalent of 620 million to 640 million barrels of oil, up from 517 million in 2014.

Rising oil prices meant revenues from the sector increased from £16bn to £21bn last year, making this the first year since 2013 that the UK Continental Shelf (UKCS) generated enough cash from sales to cover expenditure.

But the report highlighted a "serious concern" about the lack of drilling in the North Sea, with 94 wells started in 2017, the lowest number since 1973.

The report warned: "Development drilling has fallen by around 45% in just two years, which is a particularly worrying trend for the future health of the basin."

While Oil and Gas UK said a 5% increase in production was expected in 2018, it stressed the future outlook for the sector was "heavily dependent on new fields coming onstream as planned and continued effective management of production efficiency on existing assets".

The report went on: "The production outlook for the basin is much more uncertain post-2019.

"The lack of new project approvals and the recent low level of development drilling in the last few years, means it is likely that the UKCS will return to a position of production decline during the early 2020s."

While the number of jobs supported by the industry fell from 315,000 in 2016 to 300,000 last year, the 4% drop was the lowest for three years "suggesting that companies are beginning to stabilise after tumultuous periods of restructure".

And a survey of Oil and Gas UK members found more than half (56%) of companies expect to expand their workforce in 2018, with just 6% anticipating further staff cuts.

'The short-term outlook for our sector is more positive with new projects and new entrants bringing new life to the basin, but there are undoubtedly longer-term challenges.'
Deirdre Michie, Oil and Gas UK

In 2017 the UKCS produced the equivalent of 598m barrels of oil - the same amount as it had in 2016.

A small increase in production had been anticipated but the "unexpected closure of the Forties Pipeline System due to a technical issue in the last few weeks of the year" led to a dip in production in December.

Oil and Gas UK chief executive Deirdre Michie said: "Our sector is leaner, more efficient and more optimistic than it has been in recent years and 2018 looks set to be a better year.

"It's vital that we keep driving fresh thinking, innovative approaches and efficiency efforts.

"The short-term outlook for our sector is more positive with new projects and new entrants bringing new life to the basin, but there are undoubtedly longer-term challenges."

A spokesman for the Department of Business and Energy said: "We welcome the industry's confidence at the prospect of new investment decisions for developments in the North Sea.

"This government's commitment to the sector has directly contributed to making the North Sea globally competitive and more attractive to new investment opportunities.

"The oil and gas sector will continue to play a significant role for the UK's economic and energy security in 2018, supporting more than 300,000 jobs and providing the UK with 46% of its gas supply needs."

Scotland's Energy Minister, Paul Wheelhouse, commented: "The oil and gas sector remains a key component of our energy system and our economy. 

"These figures, particularly on growth in investment and a further 5% increase forecast for production in 2018, are therefore very welcome. 

"While this will boost the supply chain, companies are still finding conditions tough at this time, so we will continue to press UK Ministers to exercise their reserved powers to do more to stimulate exploration and attract fresh investment."


Download: The STV News app is Scotland's favourite and is available for iPhone from the App store and for Android from Google Play. Download it today and continue to enjoy STV News wherever you are.

One account. All of STV.

This field is required. That doesn't look like a valid e-mail format, please check. That e-mail's already in our system. Please try again.
ShowHide
Forgot password?
This field is required. This must be at least 6 characters long. Did you enter your details correctly?
If you've forgotten your details then use the 'Forgot password?' link.
Need to reset your password?

We'll send a link to reset your password to

We've sent you details on how to reset your password

Please check your email and follow the instructions.

Forgotten your email address?

Have you forgotten the email address that you previously joined with? Don't worry, by emailing enquiries@stv.tv we can help.

One account. All of STV.

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This must be at least 6 characters long.
ShowHide
This field is required. This must be at least 6 characters long.
You must be over 16 to join STV.
This field is required. This doesn't appear to be a valid date
We need this to check that you live in an STV region.
This field is required. This doesn't appear to be a valid postcode
Would you like us to email you about our great shows and services from time to time?
We'll only send emails we think you'll like (see example) based on information you have supplied and shows you have watched on STV Player. For details on emails and advertising, see our STV & You page.
Would you like to receive emails from the Scottish Children's Lottery about draws, instant games and competitions?
We support the Scottish Children's Lottery (SCL), which is managed by our colleagues at STV ELM Ltd. You can find out more about the SCL on its website, including its Privacy Policy.

By continuing you agree to our Terms of Use, and understand our Privacy and Cookie Policies.

Upload Profile Picture

Please make sure your image is under 2mb in size and a valid JPG, PNG or GIF.

Are you sure?

Unfortunately, you'll be unable to access our premium content. We’ll be sorry to see you go, but if you change your mind you can rejoin us at any time.

Please verify your STV account

Please verify your STV account using the email we sent you. If you have lost the email, we can send you another one, just click the button below.

Thanks

We've sent you a new verification email.
Please check your email and follow the instructions to verify your account.

Welcome to STV
Thanks for joining us.

Oops!

Sorry, you must be at least 12 years old to place a vote for your Real Hero.

Please review our Voting Terms of Use for more information.

Oops!

Sorry! It seems that you are using a browser that is incompatible with our voting service.

To register your vote please copy the below URL in to your regular mobile browser. We recommend Google Chrome, or Safari.

http://shows.stv.tv/real-heroes/voting

Oops!

Sorry, you seem to have already voted in this category.

Thanks for voting

Now share your vote with friends on your social network

Share on twitter Share on facebook

Cast your vote

Please register or sign in to continue.

Cast your vote

This field is required. This doesn't appear to be a valid date

Cast your vote

Please fill out this form to cast your vote. As you are under 16 years old you will not create an STV account. Why do we need these details?

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This field is required. That doesn't look like a valid e-mail format, please check.
Location This field is required.
Parental Consent This field is required.

That's you. All that's left is to click the 'Submit Vote' button below. By doing so, you confirm that you and your parent or guardian have read and accept our Voting Terms of Use, Privacy Policy and Cookie policy, and that the details you have entered are correct. We'll look after them as carefully as if they were our own.