The UK North Sea posted its largest production increase in 15 years, according to new figures.
The Scottish Government’s 2015-16 Oil & Gas Production Statistics today showed production rose by 21% year-on-year. This is the largest annual increase on record since the statistics began in 1999.
Cabinet Secretary for the Economy, Jobs and Fair Work Keith Brown said: “Although this remains a difficult time for the industry and its workforce, it is encouraging to note this increase in production as the industry adapts to the current period of low prices. Capital investment on oil and gas fields in Scottish waters was £10.2 billion and the approximate sales value of oil and gas produced in Scotland is estimated to be £13.4 billion.
“The UK Government retains control of the main economic and tax levers affecting the North Sea oil industry, though the Scottish Government continues to do all that it can to support the industry, including setting up the Energy Jobs Taskforce that meets today for the 11th time in Aberdeen.
“Our support also includes £24.5 million for increased innovation and business-support measures and the £12 million Transition Training Fund, which offers grants to individuals to support their redeployment through retraining or further education. We will also maintain pressure on the Treasury to honour promises made in last March’s budget to use the UK Guarantees Scheme for oil and gas infrastructure to help secure new investment in assets of strategic importance.
“The Scottish Government strongly believes that the North Sea oil and gas sector can have a bright future for years to come. This, however, will continue to require a concerted effort from all stakeholders.”
Oil and gas production in Scotland (including Scottish adjacent waters) is estimated to have been 70.0 million tonnes of oil equivalent. Scottish production accounted for 81% of the UK total.
The approximate sales value of oil and gas produced in Scotland is estimated to be £13.4billion. However, the sales value decreased by 23.5% year-on-year due to a weak Brent price.
The Scottish Conservatives have claimed the figures were supported by a number of tax breaks made by the UK Government and then Chancellor George Osborne last year.
Chair of the Energy Jobs Taskforce, Lena Wilson, said: “The Energy Jobs Taskforce continues to offer significant support to companies and individuals in the oil and gas sector. It’s clear that operators and the supply chain have recognised the importance of stronger collaboration, better and more efficient ways of working and seeking opportunities overseas to capitalise on our world-leading skills and experience.
“Our support has reached around 700 companies to date in areas such as business resilience, leadership and innovation and we remain committed to supporting the sector to ensure it remains a key global oil and gas hub for years to come.”
Capital expenditure on oil and gas fields in Scottish waters is estimated to be £10.2billion – a 17.6% decrease on last year’s figures.
OPEX was tallied £6.8billion – down from 6.7% from the previous year.
120,000 jobs losses are expected to have been lost from the industry by the end of the year. Oil & Gas UK said 84,000 linked to the industry were axed in 2015, with an additional 40,000 jobs losses to be lost this year.
An Aberdeen company was forced to cut half of its staff. Read more here.