LONDON Jan 10 Current high levels of investment
in Britain's North Sea are unlikely to continue after 2015,
according to a forecast from energy consultancy Wood Mackenzie
that could feed concerns about the longer-term future of the
country's oil industry.
Britain's oil and gas output has fallen by about two thirds
since 2000, posting particularly steep falls of 14.5 percent
last year and 18 percent in 2011, but big new investments have
fuelled hopes that some of the declines can be reversed.
In 2013, capital investment in the UK part of the North Sea
hit its highest level in real terms since the mid-1970s, Wood
Mackenzie said in an annual report published on Friday, but
cautioned that higher spend was also a result of rising costs
and that it was not likely to continue.
"Due to poor exploration performance in recent years,
capital investment is unlikely to be sustained at the current
high levels beyond 2015," Wood Mackenzie's head of UK upstream
research Lindsay Wexelstein said.
Britain's government is battling to revive the North Sea,
whose plunging output has acted as a drag on economic growth,
and has commissioned a review to help it do so, but the rising
cost of projects and a dearth of new discoveries in the mature
area, in its fifth decade of pumping oil, means reversing the
decline is challenging.
In November, for example, U.S. oil company Chevron
threw doubt on its North Sea Rosebank project, a big development
thought to cost around $8 billion, saying it was not currently
On the exploration front, the last two years have been light
on success, Wexelstein said, blaming lower drilling rates as
some smaller companies struggled to raise funds for exploration.
Combined investment in the North Sea over last year and this
year will reach 21.3 billion pounds ($35.1 billion), Wood
Mackenzie forecast, in line with guidance provided by industry
body Oil & Gas UK which said in August it expected 2013 capital
investment to total 13.5 billion.