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Oil and Gas Industry on Track to Meet 2005 Pilot Targets
| Date: | 10 Dec 2001 | | Details: | Oil Price Crucial To Success
Energy Minister Brian Wilson today welcomed a new survey which reveals that the UK's offshore oil and gas industry is on track to meet production and investment targets for 2005.
The interim targets, set jointly with the Government as part of the 10-year PILOT vision, are to produce 4 million barrels of oil equivalent (boe) per day and sustain investment at £3 billion (rolling average) per annum.
Brian Wilson, who chairs PILOT, said: "The close partnership between Government and Industry is working very effectively in setting joint targets and also coming up with practical solutions which make it possible to meet them. I am very encouraged by recent investment decisions."
The survey identifies the investment and production plans of Britain's 30 offshore oil and gas producing companies and was commissioned jointly by the Department of Trade and Industry (DTI) and the UK Offshore Operators Association (UKOOA), the sector's representative body. It enables the Industry to monitor progress towards meeting the investment and production targets set by PILOT, the Government/Industry initiative. PILOT's objectives are to maintain UK Continental Shelf (UKCS) competitiveness, maximise economic recovery of the nation's indigenous oil and gas reserves, and preserve jobs*.
The Industry currently forecasts that investment levels of between £3 and £3.5 billion per annum until 2005 are possible, which could sustain production of oil and gas at about 4 million boe per day. Estimates suggest that capital investment for 2002 will be between £3.3 - £3.8 billion, in the same range as this year's likely outcome.
The survey is based on the investment intentions of operators in the summer of 2001 and was carried out when oil prices were around $25 a barrel. Further price falls could have an impact on future investment plans.
Maintaining production at the projected levels will depend on timely investment in existing producing fields to slow production decline, and developing existing and new oil and gas discoveries.
PILOT member Scott Urban, Group Vice President for BP, said: "The survey reveals the UK offshore oil and gas industry's potential to maintain oil and gas production levels through to 2005, through investment in a portfolio of around 150 discoveries that could be brought forward for development.
"This, together with indications that total capital expenditure could increase by around £5 billion over 2002 - 2005 compared with last year's projections, is good news for the Industry. However, a note of caution, the survey's forecasts of UKCS production remain the same despite the projected spend. This is a signal that North Sea economics are becoming ever more challenging and points to the task that lies ahead if the Industry is to meet its objectives for 2005 and 2010."
Mike Straughen, PILOT member and managing director of AMEC Services, said: "The ongoing challenge will be to overcome the technical and commercial difficulties that can stand in the way of maximising recovery from existing fields or developing new oil and gas finds. Solutions will be developed by bringing together the collective force of operators, contractors, suppliers and trade unions with Government."
Danny Carrigan, National Officer at the AEEU and PILOT member, said: "It was predicted that jobs would be lost in the North Sea as the oil fields mature. Against that backdrop the survey findings are most encouraging. The Industry's investment plans are to be welcomed, as they will help to maintain jobs across the sector, a key goal of PILOT. Evidence already suggests jobs have been maintained this year, as projects come forward aided by PILOT's work." | | Contact: | Trisha O'Reilly, PILOT Communications
Tel: 020 7802 2422
Email: toreilly@ukooa.co.uk |
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For all press enquiries please contact:
Trisha O'Reilly at UKOOA Tel: 0207 802 2422 Email: toreilly@ukooa.co.uk
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