UK Sees 6% Opex Growth in 2018

Offshore UK operating expenditure was up 6% at £7.2bn ($8.8bn) in 2018, according to a report published on August 29 by the country’s Oil and Gas Authority (OGA), on the back of rising new field activity.

Higher outlays last year came with a 4.3% growth in production on the UK shelf to 1.7mn boe/day. Direct field opex rose by 9% to £5.8bn, driven by a 35% increase in spending on logistics and administration and a 23% rise in expenses in the northern North Sea and West of Shetland area.

Unit operating cost (UOC) edged up 2% to £11.6/boe.

The number of large manned platforms stationed on the shelf rose from 56 to 58, while the number of small manned platforms grew from 15 to 17. The tally for unmanned platforms fell from 5 to 4, while the count for floating production storage and offloading (FPSO) and floating production vessels (FPVs) climbed from 31 to 43.

Moving forward, the OGA expects opex to peak at £7.6bn in 2020 before sliding back to last year's level of £7.2bn by 2023. In the same period, production is slated to decline steadily, landing at 1.4mn boe/day. As a result, UOC is set to creep up to $14/boe by 2023.