Economic Report 1999 Index

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A Vision of the Future Many of the challenges that are setting the agenda for the industry into the new millennium are challenges with unknown solutions. For the E&P industry this is not an unfamiliar environment. Figure 22 illustrates a production profile for the UKCS prepared by the OGITF based on current technologies, and an oil price of $16/barrel. Figure 22 - Future Production: $16/barrel Scenario Source:  OGIFT 'Template for Chnage' Please click on the image below to view the full chart: From early in the new decade when today's probable fields are on stream, the overall level of production in the UKCS starts to decline. The pace of decline is highly uncertain and history suggests that most forecasts of UKCS production have proven to be pessimistic. In the medium term, production will be critically dependent on investment opportunities in and surrounding existing fields, a recovery in exploration activity and improved success rates. During the course of 1999 the industry and Government joined forces within the OGITF and "recognised that there is a positive approach which delivers a long term production future and substantial benefits to the UK plc". This is encapsulated by the Task Force's vision for 2010 of "the oil and gas industry and Government working in partnership to deliver quicker, smarter and sustained energy solutions for the new century. A vital UK Continental Shelf is maintained as the UK is universally recognised as a world centre for the global business" and further reinforced by the considerable prizes which were identified by the OGITF: Investment sustained at £3 billion per annum from UKCS activity Production at three million barrels of oil equivalent per day Prolonged self-sufficiency in oil and gas A 50% increase in exports in oil and gas supplies products £1 billion additional value from new businesses Supporting up to 100,000 jobs more than there otherwise would have been. Two key initiatives of the OGITF to bring about the vision are the establishment of LOGIC and the Industry Technology Facilitator. The OGITF vision can be supported by the new UKOOA data in Professor Kemp's study if exploration success can be increased. Translating this vision into reality will require positive actions on the part of industry and Government. The key objective faced by industry is to enhance technology and reduce costs to enable the UKCS to compete in an increasingly global marketplace. For its part, Government must provide an appropriate fiscal regime, removing disincentives for investment in old fields, and apply regulations which promote activity which are both economically and environmentally effective.