Wednesday, 21 August 2013

North Sea faces record fall in oil and gas production

Montrose Alpha

According to a story in The Telegraph today, this year could see a record fall in oil and gas production for the UK:
North Sea oil and gas production could decline by as much as 22pc this year - the biggest annual slump on record – as maintenance on ageing infrastructure hits operations, the industry body has warned. Oil & Gas UK said it now expected average output to fall to between 1.2m and 1.4m barrels of oil and gas per day (boepd) this year, down from 1.54m boepd in 2012.
Full story
The decline has been in the region of 10% a year for some time now anyway, but some major technical issues in the past year have pushed production down faster than has been typical. In some ways this isn't all bad - it means that oil and gas is still there to use later on, when prices are higher. But there's always the risk that it's not worth repairing failing machinery if there's not much left to be extracted from a particular field, leaving it locked underground for good. (Of course, from a climate change point of view that's a good thing!)

This trend doesn't fully show up in the latest DECC Energy Trends, as it only covered up to Q1 2013, but even then oil production was down 15% from a year ago, and gas down 14.5%. It'll be interesting to see what's in the September edition...

On a slightly more positive note, it seems that more attention is being paid to thorium as a nuclear fuel. Obviously nuclear energy of any sort has numerous downsides, but thorium does seem to be be 'less bad' than uranium in several ways, so it'll be interesting to watch for more developments...

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