Economic Report 2018

The reserves-to-production ratio is highly dependent on current production rates and levels of investment in developing new reserves. The increased rate of production decline seen between 2010-14, coupled with a relatively high number of projects sanctioned during this period, resulted in the reserves-to-production ratio of the UKCS briefly peaking above 16 years in 2013, before returning to the trend of around nine years. Around £40 billion of new capital investment was committed between 2010-13, with most of the 36 fields that have come onstream since 2014 having been approved during this period. Since then, only £8 billion of new investment has been committed. Unless there is a significant improvement in the rate of exploration and an acceleration in new fields gaining development, it is likely that the UKCS will again experience a period of accelerated production decline post-2020.

1

2

3

Figure 31: Importance of Continual Progression of UKCS Resources

4

25

Proven and Probable Reserves Possible Reserves Contingent Resources

20

5

15

6

10

5

7

Oil and Gas Rserves and Resources (Billion boe)

0

2000

2002

2004

2006

2008

2010

2012

2014

2016

Source: OGA

8

1,800

18

Production on Stream Pre-2014 (LHS) Production on Stream Post-2014 (LHS) Reserves-to-Production Ratio (RHS)

1,600

16

9

1,400

14

1,200

12

1,000

10

10

800

8

600

6

11

400

4

Production (Million boe per Year)

Reserves-to-Production Ratio (Years)

200

2

0

0

2000 2002 2004 2006 2008 2010 2012 2014 2016

Source: OGA, WoodMackenzie, Oil & Gas UK

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