Thursday 29 March 2012

UK oil production falls to lowest since 1970s

The UK is producing less oil and gas than it was in the 1970s. The Government say this decline was due to maintenance activities and slowdowns, which resulted in a net import dependency the highest seen since 1976. Oil production was 17.5% lower than in 2010 and was also the lowest level of production since the 1970's.

Malcolm Webb, Oil & Gas UK's chief executive said: "Nobody can be happy with this very worrying set of numbers and the industry and Government must work together to ensure this is a one-off. Up to 24 billion barrels of oil and gas remain to be extracted in the UK and it is imperative that we maximise recovery of those."

As well as the drop in oil output, the DECC figures also showed production of natural gas in 2011 fell even more sharply than oil and was 21% lower than in 2010. In 2011 imports of natural gas were greater than production for the first time since 1967.

However, there could be light at the end of the tunnel for the UK industry, as the recent budget promised help to the North Sea.

Mr Webb added: "The recent extension of the tax allowance and proposals to bring certainty to tax relief on decommissioning were very welcome but there is clearly more that can be done, particularly to stimulate new investment in existing fields and exploration."