Cost control pays off for North Sea oil producer
MAR output helps RSRUK back in black after years of heavy losses
“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