Economic Report 2018

Contents

1

1. 2. 3.

Foreword

5 6

Report at a Glance

Industry Context – Business Environment & Performance

8 9

2

3.1 3.2 3.3

Oil and Gas Markets

What do the Trends Mean for Industry? 15

The Role of Oil and Gas in a Changing Energy Landscape

16 20

3

3.4 3.5

Brexit

UKCS Exploration and Production Performance

22 24 25 28 31 36

3.6 3.7 3.8 3.9

Production Performance Industry Expenditure

4

Drilling Activity

Decommissioning Activity

4.

Vision 2035

5

4.1

UK Oil and Gas Industry – Contribution and Opportunity Adding a Generation of Productive Life to the Basin Doubling the Long-Term Opportunities for the Supply Chain Delivery - Converting Vision 2035 to Reality 41 37 38 39

4.2

6

4.3

4.4

5.

The UK Oil and Gas Industry – A Competitive Investment Proposition

7

42 43

5.1 5.2

UKCS Costs in Context

Industry Action to Sustain Cost Improvements – The Efficiency Task Force 50

5.3 5.4 5.5 5.6

Supply Chain Competitiveness Prospectivity and Resource Base UKCS Fiscal Competitiveness ‘The Changing Face’ of the UKCS

51 56 65 69 73

8

6.

Glossary

9

10

The UK Oil and Gas Industry Association Limited (trading as Oil & Gas UK) 2018 Oil & Gas UK uses reasonable efforts to ensure that the materials and information contained in the report are current and accurate. Oil & Gas UK offers the materials and information in good faith and believes that the information is correct at the date of publication. The materials and information are supplied to you on the condition that you or any other person receiving them will make their own determination as to their suitability and appropriateness for any proposed purpose prior to their use. Neither Oil & Gas UK nor any of its members assume liability for any use made thereof.

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