United Kingdom Oil and Gas Report

 Published On: Jul, 2016 |    No of Pages: 141 |  Published By: BMI Oil and Gas | Format: PDF
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BMI View: The UK's vote to leave the EU has not affected our oil and gas production forecasts as the strong project pipeline will ensure that the UK experiences a provisional uptick in oil and gas output. The long-term trend of decline will also remain in place, as high operating costs, capex reductions and a lack of significant new discoveries limit investment into the mature basin. A depreciated sterling offers a measure of upside risk as North Sea investment becomes cheaper to international operators; however we note that the uncertainty surrounding the terms of the UK's exit and a possible Scottish secession will mitigate most if not all of the favourable currency swings.

The main trends and developments we highlight in the UK oil and gas sector are: Exploration
-Our already bearish view for North Sea oil and gas exploration has only been compounded by the investor uncertainty surrounding the terms of the UK's departure from the EU. The possibility of a Scottish secession means that the fiscal and regulatory framework might change, resulting in 2016 performing worse than the woeful exploratory efforts of 2015. On the upside, a weaker pound could attract back international investors that can take advantage of lower operating and production costs.
-The impact of the tax reductions for all E&Ps operating in the North Sea will have a negligible impact on exploration levels as companies focus on maximising production rather than expanding their resource base.
-The British parliament passed regulations permitting drilling underneath protected areas that include national parks, Areas of Outstanding National Beauty (AONB), the Norfolk and Suffolk Broads and World Heritage Sites. Companies will be allowed to drill wellheads outside of protected areas and drill horizontally beneath the parks at a minimum depth of 1,200m.

BMI Industry View . 7
Table: Headline Forecasts (United Kingdom 2014-2020) . . 7
SWOT 9
Oil & Gas SWOT ... 9
Industry Forecast 11
Brexit Upstream Scenarios .......... 11
Upstream Exploration ..... 16
Latest Updates ... 17
Structural Trends .......... 17
Lacklustre Exploration To Continue In 2016 ....... 17
Exploration-Specific Incentives Required To Boost Exploration .... 20
Unconventional Gas ...... 21
Upstream Projects .......... 26
Table: United Kingdom - Major Upstream Projects . . . 26
Upstream Production - Oil .......... 41
Latest Updates ... 41
Structural Trends .......... 41
Table: A Significant Fiscal Upheaval . . 45
Table: Oil Production (United Kingdom 2014-2019) . . 49
Table: Oil Production (United Kingdom 2020-2025) . . 49
Upstream Production - Gas ......... 50
Latest Updates ... 50
Structural Trends .......... 50
Table: Gas Production (United Kingdom 2014-2019) . 55
Table: Gas Production (United Kingdom 2020-2025) . 55
Refining .. 56
Latest Updates ... 56
Structural Trends .......... 56
Table: Refining Capacity and Refined Products Production (United Kingdom 2014-2019) . . . 60
Table: Refining Capacity and Refined Products Production (United Kingdom 2020-2025) . . . 60
Refined Fuels Consumption ......... 61
Latest Updates ... 61
Structural Trends .......... 61
Table: Refined Products Consumption* (United Kingdom 2014-2019) 63
Table: Refined Products Consumption* (United Kingdom 2020-2025) 63
Gas Consumption 64
Latest Updates ... 64
Structural Trends .......... 64
Table: Gas Consumption (United Kingdom 2014-2019) . . . 69
Table: Gas Consumption (United Kingdom 2020-2025) . . . 70
Trade - Oil ......... 71
Crude Oil Trade Forecasts ........ 71
Latest Updates ... 71
Structural Trends .......... 71
Table: Crude Oil Net Exports (United Kingdom 2014-2020) . . 73
Table: Crude Oil Net Exports (United Kingdom 2020-2025) . . 74
Refined Fuels Trade Forecasts ... 74
Latest Updates ... 74
Structural Trends .......... 74
Table: Refined Fuels Net Exports (United Kingdom 2014-2019) . . 76
Table: Refined Fuels Net Exports (United Kingdom 2020-2025) . . 76
Trade - Gas (Pipeline And LNG) .. 77
Latest Updates ... 77
Structural Trends .......... 77
Table: United Kingdom - LNG Import Contracts . . 82
Table: Gas Net Exports (United Kingdom 2014-2019) . 82
Table: Gas Net Exports (United Kingdom 2020-2025) . 84
Industry Risk Reward Index ..... 85
United Kingdom - Risk/Reward Index ....... 85
Upstream Index 85
Downstream Index ....... 86
North America And Western Europe Oil & Gas Risk/Reward Index . 86
Table: North America & Western Europe Oil & Gas Risk/Reward Index . 86
Upstream Rankings: Resource Base Will Keep North America Well Ahead . 87
North America Open To Investment, At The Right Price .... 87
Resource Limitations Take Toll On Western Europe ........ 88
Table: North America & Western Europe Upstream Risk/Reward Index . . 90
Downstream Rankings: US Widens Its Lead ........ 90
Table: North America & Western Europe Downstream Risk/Reward Index . . . 92
Market Overview . 93
Energy Market Overview . 93
Regulatory Structure ...... 93
Licensing Regime .......... 93
Table: UK Licensing Regime . . . 94
Fiscal Regime .... 94
Table: UK Fiscal Regime As Of 2015 . . 94
Table: A Significant Fiscal Upheaval . . 96
Licensing Rounds .......... 96
Oil And Gas Infrastructure .......... 97
Oil Refineries .... 98
Oil Storage Facilities . 102
Oil Terminals/Ports ... 102
Oil Pipelines .. 102
LNG Terminals 103
Gas Storage Facilities 104
Table: Gas Storage Facilities . . 105
Gas Pipelines . 109
Competitive Landscape .......... 111
Competitive Landscape Summary ......... 111
Table: Key Players - UK Oil & Gas Sector . . . 113
Table: Key Upstream Players . 114
Table: Key Downstream Players . . 114
Company Profile 115
BP ....... 115
Latest Updates . 115
Table: Major Upstream Assets In The UK . 116
Table: Key Financial Data (USDmn) . . 116
Royal Dutch Shell ......... 117
Latest Updates . 117
Table: Key Assets In The UK . . 118
Table: Key Financial Data, USDmn . . . 118
Total .... 119
Latest Updates . 119
Table: Key Assets In The UK . . 120
Table: Key Financial Data, USDmn . . . 120
Regional Overview ....... 121
North America And Western Europe Oil And Gas Regional Overview ....... 121
Table: North America - Key Regional Indicators, 2015-2025 . 130
Table: Western Europe - Key Regional Indicators, 2015-2025 . . . 132
Glossary .. 134
Table: Glossary Of Terms . 134
Methodology ...... 136
Industry Forecast Methodology 136
Source 138
Risk/Reward Index Methodology .......... 138
Table: Bmi's Oil & Gas Upstream Risk/Reward Index 140
Table: Weighting . . 141
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