Oil output spike brightens North Sea's twilight years

By Amanda Cooper and Ron Bousso LONDON (Reuters) – North Sea oil output is expected to jump by a net 400,000 barrels per day (bpd) or about a fifth in the next two years, defying gloomy forecasts for the oldest deepwater basin that produces the world’s benchmark crude price. Projects from the West Shetlands to the icy fringes of the Arctic Ocean aim to add 1.2 million bpd, Reuters research shows. That will more than offset the decline in output from older fields in a region now producing about 2 million bpd. The net rise in overall production is expected to be about 400,000 bpd by 2020, according to U.S. energy-focused investment bank Tudor, Pickering, Holt & Co. The North Sea produces Brent and three other crudes – Forties, Oseberg, and Ekofisk – that make up the Brent futures benchmark. The region is expected to report its third annual production rise in a row in 2017, reversing years of sliding output. Since production began in earnest in the 1960s, about 40 billion barrels of oil have been extracted from the North Sea. A 50 percent drop in oil prices from above $100 (£77.5) a barrel in 2014 has forced some North Sea producers to sell assets. Others have adapted as they seek to extract more of the 20 billion barrels estimated to lie under Britain’s North Sea zone alone. “The drop in the oil price forced everyone to focus even more than they were on (production) uptime and operating efficiencies which have risen dramatically over the last two years,” Premier Chief Executive Tony Durrant told Reuters.

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