U.K. Oil Producers Say New Investment Vital Even as Costs Fallby
The U.K.’s offshore oil producers called on the government to expand efforts to secure new investment after exploration sank to an all-time low.
“The U.K. Continental Shelf is in urgent need of fresh investment to boost exploration and drive activity,” Deirdre Michie, chief executive officer of the industry group Oil & Gas U.K., said Tuesday in a report. “Little new investment has been approved in 2016, and 2017 looks no better.”
Oil’s collapse in the past two years has left many producers operating at a loss at aging North Sea fields, where resources are dwindling. While output rose 10 percent last year and extraction costs have dropped by almost half since 2014, the industry has suffered falling revenues and sweeping job cuts, according to Oil & Gas U.K.
“Major challenges remain, with record-low exploration and a lack of capital investment,” the group said. The government must lend its support by providing fiscal certainty and encouraging new entrants, Michie said.