Oil and gas industry pins hope on Golden Eagle lifting N. Sea out of slump

The Golden Eagle oil field
The Golden Eagle oil field

By DARA BUTTERFIELD

The Aberdeen-based trade association for the oil and gas industry has seized upon provisional new figures showing a slight increase in N. Sea production.

Oil & Gas UK has voiced confidence in the recovery in the industry after provisional Dept of Energy (DECC) figures showed a 2.5% increase in N. Sea production.

This has come month ahead of the publication of Oil & Gas UK’s Economic Report 2015, and whilst the industry is in the midst of reform. However according to the promising figures the first half of 2015 suggests recovery in efficiency leading to the first increase in production in 15 years.

Oil & Gas UK believes the improved performance is partly due to production from the large Golden Eagle field which only started producing in November 2014, as well as stronger delivery from existing assets.

China has the biggest part of Golden Eagle field
China has the biggest part of Golden Eagle field

The Golden Eagle Area Development (GEAD) is expected to reach peak production of about 70,000 barrels per day later this year.The project, which includes the Golden Eagle, Peregrine and Solitaire fields, lies about 45 miles north-east of Aberdeen.

Nexen –  a wholly-owned subsidiary of the Chinese offshore oil producer CNOOC (which was wooed last week in Peking by First Minister Nicola Sturgeon) –  has 36.54% stake in the field.
The remaining interests are held by Maersk Oil (31.56%), Suncor Energy UK (26.69%) and Edinburgh Oil and Gas (5.21%).

Deirdre Michie, Chief Executive, Oil & Gas UK, said: “Recent provisional figures from the Department for Energy (DECC) suggest that oil and gas production from the North Sea over the first six months of this year could be 2.5% higher than the same period last year. It’s still early days, but initial indications suggest that production could increase this year for the first time in 15 years.

“Provisional data for the first six months of 2015 show liquids production to be up around 3% and net gas production to be up around 2.5% this year, compared to the first six months of last year. Production in the second quarter of the year looks particularly encouraging and early figures suggest that May saw the most oil and gas produced since March 2012.

“We will be able to discuss annual estimates with more certainty by the end of the summer maintenance season, as figures for July and August are historically the most uncertain.”

“Clearly the oil price – which has more than halved since this time last year – continues to really challenge the industry. However, this positive news can indeed be attributed to the effort and investment industry has put into improving the integrity and performance of UKCS assets – something we’ll look to explore in further detail in our Economic Report 2015.”

Hover, the UK oil industry faces a deep and long-lasting crisis, according to the International Monetary Fund, which said the collapse in oil prices would stifle investment and hit production at a much faster pace than other countries.

Recent analysis by the IMF and Rystad Energy showed North Sea oil producers would be among the hardest hit by the slump in prices because huge operating costs meant they could not absorb the decline as easily as countries such as Kuwait, Iraq and Saudi Arabia.

“Canada, the North Sea, and the United Kingdom are among the most expensive places to operate oil fields. As a result, the oil price slump will affect production in those locations earlier and more intensely than in other locations,” the IMF said in its World Economic Outlook.

See also:

BP Global Energy Report: US becomes world’s No.1 oil producer: energy-C02 emissions fall to 17-year low: renewables picture unclear:  http://goo.gl/VSMxQE

Can UK oil and gas regulator save N. Sea ‘Jurassic Park’ industry from extinction in $60-barrel climate? –  http://goo.gl/Zmm1ZR

 

 

 

 

 

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