One third of UK North Sea projects to become uneconomic

OGUK warned that the falling oil price will render the projects uneconomic and lead to accelerated shut downs

A fall in the oil price to $80 a barrel would make a third of today’s likely future developments in UK waters uneconomic, and would accelerate production shut-downs and decommissioning. So warned the oil producers’ and suppliers’ organisation, Oil & Gas UK (OGUK), in its Economic Report 2014, published in late September. The UK’s oil and gas producers have seen more than a three-fold increase in unit development costs - the cost per barrel of oil equivalent (boe) to be recovered - over the past 10 years, while unit operating costs have risen nearly four-fold over the same period. The only reason the industry has been able to withstand such increases is that oil prices have nearly tripled