UK oil industry production jumped last year - but this will be "extremely challenging" to maintain in 2016

 
Jessica Morris
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Cabinets From Both UK And Scottish Governments Meet In North East Scotland
Oil prices have more than halved since June last year (Source: Getty)

UK oil and gas production rose more than seven per cent last year, nevertheless the industry will be "extremely challenged" to sustain this going into 2016.

Production for the full year of 2015 is expected to be around seven to eight per cent higher than a year earlier, according to Oil and Gas UK, which represents the UK Offshore oil and gas industry.

Nevertheless, it warned times remain tough for the industry, as well as the people who work in it. Oil prices have more than halved since June last year, forcing companies to cut costs, and in some cases make large scale job redundancies.

The estimate is based on government data which shows that the total volume of UK oil and gas production increased 8.6 per cent year-on-year for the first 10 months of 2015.

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The production of liquids rose 10.6 per cent during this period, while gas was up 6.1 per cent.

"Output in November and December tends historically to be more stable, but even so, Oil and Gas UK now expects year end production for the full year of 2015 to be seven to eight per cent higher than last year," Deirdre Michie, chief executive of Oil and Gas UK, said.

"In February 2015 we predicted a marginal increase in production for 2015, but the industry-wide focus on improving production efficiency coupled with investments of more than £50bn over the last four years to bring new fields on stream across the last twelve months is paying off and yielding a better result."

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