Contribution to the UK Economy

UK Oil and Gas Production

The UK remains a significant oil and gas producer. In 2005, the UK produced 1.2 billion boe (barrels of oil and gas equivalent¹ ) from the continental shelf, adding to the total of 35 billion boe produced since 1970. In 2005 the UK satisfied domestic oil demand for the year, producing 645 million barrels of oil which compared with UK domestic consumption of 610 million barrels of oil. The UK met 93% of gas demand, producing 85 billion cubic metres of gas; the remaining 7% being met by withdrawals from storage and imports.

Figure 2: UK Oil and Gas Production 1970-2005

The UK remains in the top ten global producers of oil and gas overall. In 2004, it ranked as the ninth largest producer above Venezuela, the UAE, Indonesia and Kuwait. In particular, the UK was the fourth largest gas producer and thirteenth largest oil producer in the world.

Figure 3: Major Oil & Gas Producing Countries 2004

The UK economy retains a competitive advantage as one of a limited number of nations producing oil and gas. Sustaining production from the UKCS will only become more imperative over time as demand for oil and gas continues to rise. In 2005, 73% of the UK’s primary energy demand was met by oil and gas and DTI projections show this is set to rise to as much as 83% over the next fifteen years, depending on the scenario considered within the DTI Energy Review.

Figure 4: UK Production and Consumption of Primary Energy 1970-2005

In 2005, primary energy consumption exceeded indigenous production for the second year running. Total UK consumption was 235 Mtoe (million tonnes of oil equivalent) compared to indigenous energy production of 216 Mtoe. The shortfall of 20 Mtoe exceeded that in 2004 due to the 10% fall in UK oil and gas production but, despite this, UK oil and gas together met three quarters of total UK energy demand. Whilst oil and gas consumption together were flat in 2005, coal demand increased by 2.3% as it became more attractive for electricity generation as oil and gas prices rose.

¹ “Barrel of oil equivalent” (boe) equates gas volumes with oil, so that a single measure can be made of the two in combination. Back