Economic Report 2019

Production Outlook Looking further ahead, OGUK expects that production will remain stable in 2020 before reverting to a position of managed decline in line with Roadmap 2035 . This will primarily be caused by a reduction in the number of new field start-ups expected in the early 2020s — the result of the low levels of new investment approvals during the downturn. Figure 14 illustrates the importance of a continual stream of new projects to support production and to ensure that as much of the UK’s oil and gas demand, and wider energy demand, is met from domestic sources. A significant production decline was seen between 2010–13, coinciding with a period of fewer, smaller new project start-ups. Since 2014, the resurgence in production that has taken place has been driven by a wave of new field starts (42 between 2014 and mid-2019). These new fields have been developed as a result of significant investment decisions made prior to the downturn. Culzean and Mariner will be the last of this current wave of large projects to start production. The relative lack of new investment between 2015–17 is expected to give rise to less production commencing between 2020–22.

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Figure 14: UKCS Production and New Field Start-Ups

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2.50

2010 New Field Starts 2013 New Field Starts 2016 New Field Starts 2019 New Field Starts

2011 New Field Starts 2014 New Field Starts 2017 New Field Starts 2020 New Field Starts

2012 New Field Starts 2015 New Field Starts 2018 New Field Starts

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2.00

Production

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1.50

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1.00

Production (Million boepd)

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0.50

0.00

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Rystad Energy, OGUK, BEIS

Maintaining a steady stream of new field investments is crucial to support production levels going forward. In a no-further-investment case, OGUK expects that output from the basin would decline by around two-thirds over the next decade. This would require the UK to import more of its energy needs, negatively affecting the UK’s trade deficit, energy security and employment (see section 3).

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