A report from the Royal Bank of Scotland notes that according to data from April 2007, production of crude oil in the UK has declined 12% during the previous 12 months.
The year-on-year decline in oil and gas production in the North Sea continued through April despite near-record investment in 2006. In addition, month-to-month production also fell well ahead of summer maintenance. These numbers conceal, however, a steady increase in gas production since August of last year.
Recent production data provide mounting evidence that the long-term decline of the North Sea will not come to a halt. The UKCS [UK Continental Shelf] is maturing rapidly and an increasing share of investment spending is needed just to maintain current production levels.
The UKCS, located in the North Sea off the eastern coast of the UK, contains the bulk of the country’s oil reserves, according to the US DOE Energy Information Administration. The UK also has sizable reserves in the North Sea north of the Shetland Islands, with smaller amounts in the North Atlantic. The UK also has the Wytch Farm field, the largest onshore oil field in Europe.
Most of the UK crude oil grades are light and sweet (30° to 40° API), which generally makes them attractive to foreign buyers. The UK has been a net exporter of crude oil since 1981. According to the British Department of Trade and Industry (DTI), the largest destinations of crude oil exports in 2004 were the United States (28 percent), the Netherlands (21 percent), Germany (17 percent), and France (14 percent). Much of the crude oil exported to the Netherlands is not actually consumed there, but rather sold at the Rotterdam spot market. In 2005, the UK exported 219,000 bbl/d of crude oil and 167,000 bbl/d of petroleum products to the U.S., contributing 2.2 percent and 4.8 percent to total U.S. crude oil and petroleum product imports, respectively.