UK Crude Output Rises for 2nd Consecutive Year

Gas production is currently less than 40% of the peak output seen in 2000. Gas production is currently less than 40% of the peak output seen in 2000.

UK production of crude oil and natural gas liquids increased by 4.8% on the year in 2016, the second annual rise in a row, the UK Department for Business, Energy and Industrial Strategy said in its provisional figures for 2016. 

Most of the growth came from fields that feed into the Flotta and Forties terminals in the North Sea, the department said, Oil Price reported on Friday. The UK’s gas production increased by 3.6% in 2016, the third consecutive annual increase, mostly due to production from the new Laggan field west of the Shetland Isles. Still, gas production is currently less than 40% of the peak production seen in 2000. 

Last year, UK refineries increased intake of domestically produced crude oil, the department noted. But despite rationalization of the refining capacity, refinery production “was similar to last year, down 2.4%”. 

Demand for petroleum products, however, increased by 2.5%, the third consecutive annual rise, with notable growth in road fuel demand and oil products for use as feedstock in the petrochemicals industry.

Investment into the UK Continental Shelf (UKCS) sea areas, which incorporates all of the UK held parts of the North Sea, had fallen down to $11.3 billion (£9 billion) in 2016 compared to a record $18.58 billion (£14.8 billion) two years ago, trade association Oil and Gas UK said in its economic report for 2016. 

Total expenditure has dropped over the past two years, as companies cut back spending to preserve cash flows. Production, however, has risen, thanks to increased efficiency in existing assets, field restarts, and new start-ups, according to the association’s report.

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