Monday 23 October 2000

UKCS Oil & Gas Production Set to Increase

The increased investment levels forecast in the UKOOA survey released today mean that, contrary to previous estimates, production levels in the UK Continental Shelf (UKCS) could potentially rise for the next three years if investment plans for 2001 and beyond are achieved.

Gas production levels could potentially go on increasing until 2005,whilst oil will do so until 2003. Combined production of oil and gas would in this case continue to rise to a peak in 2004. With new exploration potentially reducing the rate of the inevitable long-term decline of the UK sector, the UKCS is on course for the PILOT vision of producing 3M barrels of oil equivalent per day (boed) in 2010.

These new production forecasts also mean that the UKs self-sufficiency in oil and gas production can be extended, bringing with it enhanced security of supply.

Dave Smith, UKOOA President, ILT Member and President of Marathon Oil UK, supported the ILTs findings: "There are compelling reasons to invest here. The benefit of the established infrastructure, the UKs fiscal stability, together with the UKs track record, is that it offers investors swifter development times. Although projects in other parts of the world can be more profitable, they can also take longer to provide a return."

Sir Ian Wood, CEO Wood Group who co-chairs the ILT, also welcomed the forecast. "We have the latest technology and skills to respond rapidly and efficiently to new projects," he said.

"For example, the UK holds the world record for the fastest subsea tieback to a satellite development. These skills allow us to remain competitive and are the basis of us winning export orders."

Note to Editors

1. PILOT, the successor body to the Oil and Gas Industry Task Force (OGITF) was established in January this year to ensure that the OGITF deliverables and vision are achieved. PILOT is made up of twenty-three key Government representatives and recognised leaders from the industry and meets on a quarterly basis.

2. The Industry Leadership Team (ILT) was formed in 1998 to represent the oil and gas industry supply chain and unions during the deliberations of the OGITF and now continues in PILOT. It is made up of twenty-one key figures from across the industry, including operators, contractors, suppliers and unions.

3. PILOT Objectives

To make Pilots vision a practical reality, specific deliverables were defined. The strategy is for 10 years of Industry/ Government co-operation aimed at achieving the following outcomes in the year 2010.

* Maintenance of a production level of 3m boepd

* £3bn per annum invested

* Prolonged self sufficiency in Oil & Gas

* Up to more than 100,000 more jobs than would have existed

* 50% increase in exports (by 2005)

* £1bn per annum additional revenue from new business

For more information, please call 020 7802 2400.