Offshore oil and gas production outlays have fallen significantly in recent years, and the United Kingdom has led the way in cost-cutting, according to Rystad Energy.
The Norway-based consultancy said in a statement dated December 8 that it had conducted an analysis comparing operational expenses around the world. This analysis shows that the UK succeeded in reducing per-barrel production costs by 31% in the five-year period beginning in 2014 and ending in 2018, followed by Norway at 19% and the United States at 15%.
Sara Sotilotta, an oilfield service analyst for the consultancy, commented: “The UK has experienced the greatest reduction in opex per [barrel of oil equivalent], falling from more than $30 per barrel in 2014 to just $16 per barrel in 2019. The drop is attributable to two main factors: the general increase in production, and the falling share of production from mature fields as new fields came on-stream and old fields were shut-in.”
The UK, Norway, and the U.S. have been the most striking examples of a general decline in offshore operational expenses, Rystad commented. Costs have gone down in many regions as operators have used innovation to counter the pressure generated by low oil and gas prices and have emphasized strategic planning, efficiency in the management of maintenance programs, and the introduction of new technologies, it said.