A recent UK upstream oil and gas industry review by energy, metals and mining analysts and consultants Wood Mackenzie suggested this year is pivotal for the UK and those in the sector should look to 2014 with cautious optimism.
Last year capital investment in the industry reached its highest level since the mid-1970s. It is anticipated that over £21 billion will be spent across 2013 and 2014 in order to minimise project delays, improve production performance and exploration success rates. It is also promised that new fields are to be implemented into industrial production. But it is argued that in order to ensure the industry’s longevity it is argued there needs to be improvements in exploration success rates and production performance.
However spiralling costs mean project economics are under pressure and future developments have been put on hold. Meanwhile higher levels of activity couple with stretched resources are resulting in project delays and there hasn’t been as many new fields implemented as expected.
Going back to Wood Mackenzie’s Review, their final recommendations could change how the sector is regulated and the Scottish independence referendum this September will decide the division of oil and gas assets between Scotland and the rest of the UK.