Britain’s oil and gas fields have increased production for the first time in more than 15 years, figures show.
Government statistics for the first 10 months of 2015 show oil and gas produced on the UK continental shelf up 8.6% from a year earlier, the industry body Oil & Gas UK said. It added that, based on that number, it expected production for all of 2015 to be between 7% and 8% higher.
The result was better than the small increase it had expected, the group said, but it warned that improving production this year would be hard after oil prices slumped to levels not seen since before the financial crisis.
Britain’s oil and gas output has more than halved in the last 15 years as accessible sources ran low and investment in new fields failed to keep up with demand. A fresh push to explore new areas of the North Sea in recent years led to new fields starting up in 2015.
Deirdre Michie, Oil & Gas UK’s chief executive, said: “In February 2015 we predicted a marginal increase in production for 2015, but the industry-wide focus on improving production efficiency coupled with investments of more than £50bn over the last four years to bring new fields on stream across the last 12 months is paying off and yielding a better result.”
Oil producers such as Shell, Centrica and BP have slashed investment and announced thousands of job cuts to adapt to crude priced below $40 a barrel amid slowing demand and a glut of oil. Many new fields in the North Sea were commissioned when oil was trading at more than $100 a barrel and, Michie said, there would be more job losses this year.
“The fact is that the value of our product has more than halved,” she said. “Times are really tough for this industry and for the people working in it. We will continue to see job losses as we move into 2016 and we must be thoughtful and supportive of our colleagues and their families who are being made redundant or who are at risk of being made redundant.”
Brent crude futures, the global benchmark, rose more than 3% on Monday after a breakdown in diplomatic relations between Saudi Arabia and Iran raised fears of supply restrictions. But the oil price has fallen from $115 in the summer of 2014 and some analysts believe it has further to fall.
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