Tuesday, October 11, 2011

United Kingdom Natural Gas and Oil Production Continues Decade-Long Decline

EIA, Today in Energy, Sept 21, 2011

 Source: U.S. Energy Information Administration, United Kingdom Country Analysis Brief.Download CSV Data

The United Kingdom (U.K.) is the largest producer of oil and second-largest producer of natural gas in the European Union [after the Netherlands -- D.R.]. Due to steadily declining production since the early 2000s, the U.K. became a net importer of natural gas and oil in 2004 and 2005, respectively.

In 2010, the U.K. produced 1.4 million barrels per day (bbl/d) of oil and consumed 1.6 million bbl/d. [Please see remarks below -- D.R.]. While consumption remained relatively constant throughout the last decade, 2010 production declined 7% from 2009. Further declines are expected: the U.S. Energy Information Administration's Short-Term Energy Outlook predicts the U.K.'s production will fall to 1.2 million bbl/d in 2012. Despite decreasing production, the U.K. remains one of the European Union's leading petroleum exporters; in 2010, the U.K. exported 832,000 bbl/d, more than half of its total production.

Source: U.S. Energy Information Administration, United Kingdom Country Analysis Brief.Download CSV Data

In 2010, U.K. natural gas production was 2.0 trillion cubic feet, a 5% drop from 2009, and the lowest level since 1992. Natural gas consumption rose 7% in 2010. To offset its declining natural gas production in the North Sea, the U.K. is importing more liquefied natural gas (LNG). Deliveries of LNG to the U.K. were up 0.86 billion cubic feet per day, or 54%, during the first nine months of 2011 compared to the same period in 2010.

Because discoveries of new oil and natural gas reserves have not outpaced the maturation of existing oil and natural gas fields, production from both has declined. The U.K.'s increasing reliance on imported natural gas and oil has spurred the government to develop energy policies to focus on enhanced oil and gas recovery, as well as increased cooperation with Norway—U.K.'s largest oil supplier. The U.K. has also invested heavily in renewable energy; according to the U.K. Department of Energy and Climate Change, the U.K. has the largest offshore wind resource in the world.

EIA's United Kingdom Country Analysis Brief features additional analysis of these trends, along with a broad discussion of the U.K.'s energy sector. [Full story]

(Note that oil production refers to the total oil supply, including the production of crude oil, natural gas plant liquids, and other liquids, and refinery processing gain. While oil consumption refers to the total petroleum consumption, including internal consumption, refinery fuel and loss, and bunkering. UK crude oil production, including lease condensate, dropped to 1.2 million bbl/d in 2010, from about 2.7 million bbl/d in 1999. According to Oil and Gas Journal (OGJ), UK's proved oil reserves stood at 2.858 billion bbl as of Jan 1, 2011, a decrease of 7.4% when compared with the Jan 1, 2010. Also, according to OGJ, the UK had 9,040 billion cubic feet (bcf) of proven natural gas reserves as of Jan 1, 2011, a 12% decline from the previous year. -- D.R.)

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