Oil and gas production in Western Europe* was in decline from 2000 to 2014. During this period, liquid production decreased from 6.7 million bbl/d to 3.4 million bbl/d and gas dropped from 266 Billion m3 to 230 Billion m3. In 2015 liquid production increased by 200 kbbl/d, the largest since 1996. The change in liquid production is due to a combination of new project developments (Gudrun and Golden Eagle), redevelopment of old producing fields (Valhall and Ekofisk) and less down time during the summer of 2015. Gas on the other hand did not experience the same growth story, as it decreased 9.9 Billlion m3 during 2015. The gas reduction was driven by the continued decline of the Groningen field in the Netherlands but partly offset by an increase in the Norwegian gas fields. Total production for the year increased 11% in the UK, 6% in Norway and decreased in the Netherlands.
In terms of exploration, 2015 was a disappointing year with 430 million boe of new volumes discovered, compared to production of 2,700 million boe (implying a 16% resource replacement ratio). The largest discoveries last year were Dalzier (UK, ENGIE operated), Mustard (UK, Chrysaor), Julius (Norway, Statoil) and Snefried North (Norway, Statoil). The 2015 exploration results add to the trend over the last four years, where discovered resources have declined.
The total activity level was affected by the lower commodity prices in 2015. Total E&P spending for the Western Europe fell 25% in 2015 compared to 2014 and ended at 78 BUSD. The drop is caused by lower maintenance activity, reduction in the prices that oilfield service companies charge the E&P companies and weaker Norwegian krone. In 2016, spending is expected to fall another 10%, before gradually increasing in 2017.
Despite the reduction in the short/medium term activity and the disappointing exploration results over the last year, Rystad Energy forecasts that the liquid production from Western Europe will increase going forward due the large projects that is currently being developed. This is quite an achievement since production has been generally declining for the last 15 years. However, this requires that oil price recover from the current low values. 2015 has already shown that production from Western Europe is coming back.
(* Western Europe: Norway, UK, Netherlands, Denmark, Germany, France, Austria, Ireland)
Espen Erlingsen, VP Analysis
Phone: +47 24 00 42 00
Mobile: + 47 41 44 77 61
Julia Weiss, VP Marketing
Phone: +47 24 00 42 90
Mobile: +47 48 29 87 61
About Rystad Energy
Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.
Rystad Energy’s headquarters are located in Oslo, Norway, with additional research teams in India. Further presence has been established in Norway (Stavanger), the UK (London), USA (New York & Houston), Russia (Moscow), Brazil (Rio de Janeiro), Africa as well as South East Asia.