North sea oil companies profitability languishing near 20-year lows
The profitability of the North Sea oil sector has fallen to its lowest level since 1997, as low oil prices continue to bite.
UK Continental Shelf firms rate of return on their investments fell from 1.9 per cent in the third quarter of last year to 0.6 per cent in the last quarter of 2015, according to data released today by the Office for National Statistics today.
“This is the lowest quarterly figure since the series began in 1997 and reflects falling oil and gas prices, which failed to be offset by increased quarter-on-quarter sales,” the ONS said.
The rate of return is the income from an investment over a set period of time, expresed as a percentage of its initial cost.
It 3.5 per cent for 2015 as a whole, which was also the lowest since the ONS series began in 1997.
UK oil and gas firms are under increasing pressure, with crude tumbling from over $110 in the middle of 2014 to just $40 today.
Earlier this year, Chancellor George Osborne announced tax relief measures to help them weather the downturn as part of his Budget.
He bowed to pressure from Scottish politicians, industry bodies and North Sea oil figures who had all called on the government to address the industry's urgent predicament.
