Economic Report 2000 Index

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Industry Activity in 2000 Development Activity Development spending in 2000 is expected to be similar to 1999 at about £3-£3.2 billion. Among the highlights in 2000 was the installation of the first phase of Elgin/Franklin and Shearwater gas condensate fields and the associated gas pipeline to Bacton. The platforms and pipeline for these fields are among the last of this generation of infrastructure. Several potential developments were announced in 2000 as indicated in Box 2 and in September 2000 UKOOA's survey of operators' intentions shown in Figure 11 indicated potential increased activity and spending from 2001 to 2004 of over £12 billion. This is an ambitious programme and represents an increase of £4 billion over last year's estimate and includes probable and possible developments which could result in a rise of capital expenditure towards £4 billion in 2001, although a significant proportion of these projects require further definition and appraisal. Over 40% of this investment is for drilling, in existing fields, new satellite developments and new fields. Most of the projected new field developments will employ sub-sea well-heads and existing platform and pipeline infrastructure in order to contain costs. This infrastructure is costly to maintain and depends on high throughput to keep costs economic. Box 2 - Recent Announcements Concerning Investments Operator Field(s) Approximate Investment BG Blake £158 million Conoco Vixen £35 million BHP Keith £25 million Phillips Jade £191 million Ranger Columba B/D £40 million ExxonMobil Skene £250 million BP   $4 billion over 4 years Shell   50% increase in previous capital expenditure plans for 2001, to $1,200 million Kerr McGee Leadon $700 million Talisman Beauly/Halley/Hannay Capital Expenditure up 66% in 2001 over 2000 Ranger Kyle £40 million TotalFinaElf Nuggets £211 million