Oil (Production and Costs) (Hansard, 25 July 1977)

§ Mr. Cronin

asked the Secretary of State for Energy (1) if he will indicate the respective quantities and unit costs and total production costs of North Sea oil landed in 1976, 1975, and 1974;

(2) if he will indicate the total quantity, cost of production and unit production costs of North Sea oil landed during the first six months of 1977 and any lesser convenient period during that time;

(3) if he will give figures indicating the approximate total production of North Sea Oil he anticipates in 1977, 1978, 1979 and 1980, and the approximate total production costs during these periods;

(4) if he will give approximate estimated figures for the average yearly production 78W of North Sea oil for the years 1980 to 1985 inclusive, 1986 to 1990 inclusive, 1990 to 1995 inclusive and 1995 to 2000 inclusive.

§ Dr. John A. Cunningham

The relevant information is given in the 1977 Brown Book but is summarised here for convenience.

Offshore oil production began in 1975, and totalled 1.1 million tonnes. 1976 production was 12 million tonnes, and production in the first half of this year totalled 17 million tonnes. The forecast ranges of oil production up to 1980 are:

				million tones
1977	…	…	…	40–45
1978	…	…	…	60–70
1979	…	…	…	80–95
1980	…	…	…	100–120

Annual production in the years 1980–85 is expected to be in the range of 100 million to 150 million tonnes. During and beyond this period the uncertainties become greater and forecasts are increasingly sensitive to the assumptions made, especially about the rate of future discoveries.

For fuels already in production or under development, the unit cost of production is estimated to range from $3 to $9 a barrel at 1976 prices, including exploration, development and operating costs, and interest. It is unrealistic to speculate on the future movement of costs as these will depend on the type of fields discovered and the production methods used. It is estimated that capital expenditure of the order of £10,000 million will have been spent on existing and new oil and gas developments by 1980. Because of the different patterns of expenditure and production from field to field, and the fact that expenditure in one year cannot be equated with production in the same year, any attempt to give producion cost figures for 1975, 1976 and 1977 would be unrealistic.