Is UK Oil Production in Trouble?

 

Oil production in the North Sea has had a rollercoaster ride over the last couple of months.

It started with Chinese firms discussing deals worth £11bn with two large North Sea refineries, but now signs are mounting towards a reduced output from the UK’s oil supply.

The details of these deals emerged last month and would see China cement their stakes in North Sea oil production and take control of Buzzard – the UK’s largest producing oil field. The two separate deals, with Canadian oil producers Nexen and Talisman, will give China 13% control over UK oil and gas production should both deals go through.

Yet the flurry of interest from the East may come to a grinding halt, as stories reporting record low supplies of the North Sea crude oil streams have hit the headlines.

Before the deals were announced economy experts warned of sharp falls in oil production over the next five years. The Brent benchmark, made up of four different crude oil streams, is expected to report an output of 720,000 barrels – a record low.

For now, the rise in oil prices has protected the falling oil levels. But serious problems could be created for the UK oil industry if the prices start to drop.