UK Operators Need to Take FIDs Faster: OGA

Operators on the UK continental shelf (UKCS) need to quicken their pace in bringing new discoveries into production to make use of existing infrastructure, the government’s Oil and Gas Authority (OGA) said in a report published on November 1.

According to OGA’s 2018 UKCS Projects Insights Report, it takes on average 25 years for a final investment decision to be taken on a discovery and a further three years to launch production.

But the longer time-frame projects are typically  discoveries made in the age of relative plenty. So they pre-date the government policy of Maximising the Economic Recovery of the UK CS and the subsequent creation of the OGA.

Some 75% of future projects will be tie-backs, relying on existing infrastructure instead of being standalone developments, it said.

“Pace is an issue as the window to use existing infrastructure reduces as more fields cease production,” the OGA said. “The duration from discovery to final investment decision needs to be reduced.”

According to the body, 20 new projects were greenlit last year, requiring £3.9bn ($5.05bn) in capital expenditure, with a further 10 entering production. Annual capital spending is expected to decline from the current £5bn to £3bn by 2021. The number of project approvals will peak at 25 in 2020, the report stated, but will then drop sharply to 10 in 2021.