Cost con­trol pays off for North Sea oil pro­ducer

MAR out­put helps RSRUK back in black af­ter years of heavy losses

The Press and Journal (Moray) - - BUSINESS - BY MARK LAMMEY

“We have sus­tained this im­prov­ing trend into 2018”

North Sea oil pro­ducer Rep­sol Sinopec Re­sources UK (RSRUK) was back in the black in 2017 af­ter years of post­ing heavy losses.

Op­er­at­ing cost per bar­rel was low­ered to $40.20 in 2017 from $52.53 a year ear­lier.

It recorded pre-tax prof­its of £367 mil­lion last year, a vast im­prove­ment on a deficit of £1.1 bil­lion in 2016. Losses came to £628m in 2015.

Full-year sales rev­enues rose to £777m from £526m, ac­cord­ing to ac­counts pub­lished by Com­pa­nies House.

Cap­i­tal ex­pen­di­ture was cut by al­most 50% to £157m last year as it com­pleted a sig­nif­i­cant North Sea in­vest­ment pro­gramme.

A large chunk of re­cent spend­ing has gone to­wards its flag­ship Mon­trose Area Re­de­vel­op­ment (MAR).

RSRUK achieved first oil from the Shaw field, part of the MAR project, in May 2017, with Cay­ley com­ing on stream a month later.

Out­put from MAR helped the com­pany pro­duce 52,421 bar­rels of oil equiv­a­lent per day last year, up 24% on 2016.

Other mile­stones from 2017 in­cluded the end of pro­duc­tion from the Buchan Al­pha plat­form, some 36 years af­ter started pump­ing oil.

A spokesman for RSRUK said: “We have sus­tained this im­prov­ing trend into 2018 with con­tin­ued down­ward pres­sure on lift­ing costs and im­proved pro­duc­tion ef­fi­ciency across our port­fo­lio.

“We ex­pect to safely in­crease over­all pro­duc­tion again this year de­spite op­er­at­ing fewer pro­duc­ing as­sets, and we con­tinue to work to ma­ture and op­ti­mise es­ti­mates of our decom­mis­sion­ing costs based on learn­ings from suc­cess­ful on­go­ing de­com ac­tiv­ity.”

OFF­SHORE: Out­put from the Mon­trose Area Re­de­vel­op­ment and re­duced op­er­at­ing costs per bar­rel helped put RSRUK back in the black

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