Low oil price “could halve UK spend in 2015”

The amount of money spent on getting oil and gas out of the UK’s stretch of North Sea could halve if low oil prices continue, suggests new analysis by Wood […]

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By Vicky Ellis

The amount of money spent on getting oil and gas out of the UK’s stretch of North Sea could halve if low oil prices continue, suggests new analysis by Wood Mackenzie.

Its latest yearly review is positive about investment in the UK in 2014, finding it to be in the top 10 countries for “upstream” spending, with £12 billion pouring into the UK sector.

Around £3.8 billion of this was linked to just five assets last year, the fields at Mariner, Schiehallion, Laggan, Clair and Golden Eagle, according to Ms Erin Moffat, UK Upstream Senior Research Analyst for Wood Mackenzie.

However the boosted investment may not continue, she warns: “A low oil price could also impact producing fields with high operating costs”.

The analyst estimates current oil prices could put £2 billion could be at risk over the next two years.

Ms Moffat adds: “Without this, UK Upstream spend in 2016 would be around £6.3 billion – just over half of 2014 levels.”