UK Reports Worst Year for Oil and Gas Industry
In the past forty years of the oil and gas industry in the United Kingdom, the past year was its worst annual reported performance. UK oil and gas sector incurred more expenditure than profit, due to the global fall in oil price and also the eminent increase in production cost. Precisely £5.3 billion was invested into this sector last year, this amount is more than the income derived that year.
Such high expenditure rate was only witnessed in 1970 before the global oil boom. UK Oil and Gas Industry annual report speculated a decrease in investment and drilling in this new year. It also solicited the input of the government to save the industry from future decadence.
The poor report revealed a continuous decrease, falling short of expected target. A typical example is the fact that only 14 oil wells were drilled, falling short of the expected target of 25 oil wells. The discovered reserve of oil were only 50 million barrels.
For the present year the expectation of the UK oil and gas sector has dropped. The new target is between 8 to 14 drilled oil wells, and 5 more to support previous ones.
“Even at $110 per barrel, the ability of the industry to realise the full potential of the UK’s oil and gas resource was hamstrung by escalating costs, an unsustainably heavy tax burden and inappropriate regulation”. This was said by Malcolm Webb, the Chief Executive of the United Kingdom Oil and Gas Industry.