Guardian: North Sea Oil and Gas Industry Suffers Worst Losses in Decades

The North Sea oil and gas industry is facing a severe challenge to its future viability after suffering a dire year which involved the worst losses in decades, a new report has revealed.

Oil & Gas UK said its annual activity survey painted a bleak picture of the North Sea’s prospects after discovering that the sector as a whole lost £5.3bn last year, the worst figure since the 1970s.

Its report said the cost of producing a barrel of oil had risen to a record high of £18.50, on top of investment, tax and decommissioning costs. Falling oil prices, which slumped to below $50 a barrel earlier this year, cut revenues to just over £24bn for the year, the lowest since 1998.

The industry body said the financial situation was so dire that large areas of the North Sea could be “sterilised”, because oil companies would be unable to afford to develop and exploit unused fields.