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martes, 24 de enero de 2017

Today Donald Trump cleared the way to Keystone XL (Peter Barker and Coral Davenport)




WASHINGTON — President Trump sharply changed the federal government’s approach to the environment on Tuesday as he cleared the way for two major oil pipelines that had been blocked, and set in motion a plan to curb regulations that slow other building projects.
In his latest moves to dismantle the legacy of his predecessor, Mr. Trump resurrected the Keystone XL pipeline that had stirred years of debate, and expedited another pipeline in the Dakotas that had become a major flash point for Native Americans. He also signed a directive ordering an end to protracted environmental reviews.
“I am, to a large extent, an environmentalist, I believe in it,” Mr. Trump said during a meeting with auto industry executives. “But it’s out of control, and we’re going to make it a very short process. And we’re going to either give you your permits, or we’re not going to give you your permits. But you’re going to know very quickly. And generally speaking, we’re going to be giving you your permits.”
The decisions expanded an effort to unravel much of the policy structure left by former President Barack Obama, who made fighting climate change a central priority. Just a day earlier, Mr. Trump formally abandoned the Trans-Pacific Partnership, an ambitious 12-nation trade pact negotiated by Mr. Obama.
Continue reading the main story
In his opening days in office, Mr. Trump has also modified or reversed Mr. Obama’s policies on health careabortion and housing while ordering a freeze of any pending regulations left behind by the former administration.
The pipelines were more about symbol than substance but generated enormous passion on both sides of the debate. Mr. Obama rejected the proposed Keystone pipeline in 2015, arguing that it would undercut American leadership in curbing the reliance on carbon energy. The Army sidetracked the Dakota Access pipeline in North Dakota last month in the waning days of the Obama administration.
Environmental activists quickly denounced Mr. Trump’s decisions. “Donald Trump has been in office for four days, and he’s already proving to be the dangerous threat to our climate we feared he would be,” said Michael Brune, the executive director of the Sierra Club.
Mr. Trump made clear on the campaign trail that he saw Mr. Obama’s environmental policies as a threat to the economy and dismissed climate change as a hoax perpetrated by China. Myron Ebell, a climate change denier who headed Mr. Trump’s Environmental Protection Agency transition team, has drafted a 50-page blueprint for how he could eliminate Mr. Obama’s climate change policies. “It is designed to implement all of the president’s campaign trail promises — every single one,” Mr. Ebell said this week in an interview.
Mr. Trump’s biggest target may be emission rules that would force the closing of hundreds of coal-fired power plants meant to be replaced by wind and solar power. But they are caught up in court battles that could run for months or years.
By contrast, he could more quickly soften Mr. Obama’s rules requiring tougher vehicle emission standards. Mr. Trump met on Tuesday with executives of major American automakers, who complained that before leaving office, Mr. Obama finalized an ambitious E.P.A. rule requiring that vehicles average 54.5 miles per gallon by 2026. Mr. Trump said he would help with burdensome regulations, but offered no specifics.
Mr. Trump could lift a moratorium instituted last year by Mr. Obama on new coal mining leases on public lands. As soon as next month, the Republican-led Congress may pass legislation undoing Mr. Obama’s regulations on the practice of mountaintop-removal coal mining and on leaks of planet-warming methane emissions from oil and gas drilling rigs.
In the meantime, the Keystone and Dakota pipelines provided Mr. Trump with visible ways to demonstrate action. As proposed by TransCanada, an Alberta firm, Keystone would carry 800,000 barrels a day from the Canadian oil sands to the Gulf Coast. Republicans and some Democrats said that it would create jobs and expand energy resources, while environmentalists said it would encourage a form of oil extraction that produces more gases that warm the planet than normal petroleum.
Studies showed that the pipeline would not have a momentous effect on jobs or the environment, but both sides made it into a symbolic test case. The State Department estimated that Keystone would support 42,000 temporary jobs for two years — about 3,900 of them in construction and the rest through indirect support, like food service — but only 35 permanent jobs. Similarly, the government concluded that Keystone’s carbon emissions would equal less than 1 percent of the total greenhouse gas emissions in the United States.
“Keystone has never been a significant issue from an environmental point of view in substance, only in symbol,” said David L. Goldwyn, an energy market analyst and a former head of the State Department’s energy bureau in the Obama administration.
But it was a symbol Mr. Trump found important enough to seize on early in his presidency. He signed an executive memorandum inviting TransCanada “to promptly resubmit its application to the Department of State for a presidential permit” for the pipeline, although the document did not guarantee approval.
The president told reporters he would “renegotiate some of the terms” — including possibly an insistence that the pipeline be built with American steel — but left little doubt that he wanted it approved. “We’ll see if we can get that pipeline built,” he said. “A lot of jobs.”
In a statement, TransCanada accepted his invitation to seek permission again. “We are currently preparing the application and intend to do so,” the company said, vowing that it would create jobs and still protect waterways and other sensitive resources.
The Dakota Access pipeline in North Dakota became the focus of protests when the Standing Rock Sioux Tribe objected to its construction less than a mile from its reservation. The tribe and its allies won victory last month when the Army Corps of Engineers announced that it would look for alternative routes for the $3.7 billion pipeline instead of allowing it to be drilled under a dammed section of the Missouri River.
Mr. Trump signed an executive memorandum directing the Army “to review and approve in an expedited manner” the pipeline, “to the extent permitted by law and as warranted.” In his session with reporters, he added, “Again, subject to terms and conditions to be negotiated by us.”
Mr. Trump owned stock in Energy Transfer Partners, the company that is building the Dakota Access pipeline, according to his most recent filing with the Federal Election Commission. Last month, a spokesman for Mr. Trump said he sold all of his stock in June, but there is no way of verifying that sale, and Mr. Trump has not provided documentation of it.
Critics vowed to keep resisting the projects. Jan Hasselman, a lawyer for Earthjustice, an environmental law group representing the tribe, said Mr. Trump was discarding the findings of a review. “They’re just ignoring the problems that the government has already found,” he said, “and that is the kind of thing that courts need to review very closely.”
In Canada, the government of Prime Minister Justin Trudeau welcomed Mr. Trump’s decision. “We have been supportive of this since the day we were sworn into government,” Jim Carr, the natural resources minister, told reporters. Mr. Carr said the American reversal will lead “to a deepening of the relationship across the border.”
In addition to the Keystone and Dakota directives, Mr. Trump signed three others intended to ease the way for businesses and to promote American manufacturing. One instructed the Commerce Department to develop a plan to ensure that future pipelines built in the United States be constructed of American-made materials.
Another was aimed at streamlining what he called “the incredibly cumbersome, long, horrible permitting process and reducing regulatory burdens for domestic manufacturing.” The last directive was intended to expedite environmental reviews for “high-priority infrastructure projects” like highways and bridges.
Some news reports on Tuesday said that the E.P.A. and other departments had issued orders forbidding employees from issuing news releases or posting on social media. But longtime officials in multiple agencies said the guidance was similar to that of when Mr. Obama took office eight years ago.

sábado, 7 de enero de 2017

President-elect Donald Trump's plan: Keystone XL - Bloomberg.


President-elect Donald Trump’s plan to put a supporter of the Keystone XL pipeline into a crucial decision-making position may give the controversial pipeline a leg up.
If approved as Secretary of State, Exxon Mobil Corp. Chairman and Chief Executive Officer Rex Tillerson would be in a position to approve the pipeline’s presidential permit, a requirement for energy projects that cross an international border. President Barack Obama rejected the $8 billion project in 2015, saying it wasn’t in the national interest.
“Keystone XL would do more than deliver oil from Alberta and North Dakota’s Bakken Shale to refiners on the Gulf Coast,” Tillerson said in an April 2015 speech. “It would improve U.S. competitiveness, increase North American energy security, and strengthen the relationship with one of our most important allies and trading partners.”
Trump has expressed support for infrastructure projects, including adding pipelines. He said this weekend that he will issue a decision “fairly quickly” on Keystone, in addition to saying “something will happen” on the controversial Dakota Access pipeline.

Project Writedown

TransCanada Corp. was forced to write down $3 billion after the plan was rejected by the Obama administration. The company filed suit over the denial and began one of the largest trade appeals ever brought against the U.S., seeking to recoup $15 billion of costs and damages.
Tillerson’s potential appointment "has a meaningful impact on how we should think about Trump’s international energy policy going forward," but the revival of Keystone XL may not be in his hands, said Katie Bays, an analyst at Height Securities LLC, an advisory and investment firm based in Washington D.C.
The fastest way to approve the project may be to take the State Department out of the process, Bays said. Trying to reverse the previous decision "clearly creates an opportunity for a legal challenge" -- and Tillerson is likely to support a move that lowers the bar for infrastructure projects more broadly.
Advisers to Trump are exploring a strategy to speed up the approval process that includes rescinding a 1968 executive order that put the State Department in charge of permitting border-crossing oil pipelines, according to people familiar with the transition planning.
"It’s primarily political," Bays said. Resurrecting the project is "a feather in the cap for a Republican Congress and a Republican administration."

‘Firmly Committed’

TransCanada remains "firmly committed" to the project and "will be in a better position to provide comment on our next steps and the path forward after the transition process has been settled," spokesman Mark Cooper said in an e-mailed statement.
"TransCanada does not feel it is its place to speak to the transition process in the U.S.," he said. "We are sensitive to the enormous amount of work that is going into forming the new administration and are respectful of that."
The company’s shares rose as much as 2.6 percent to C$60.49 on Tuesday, the most intraday since Nov. 9.
If the pipeline operator did reapply for the border-crossing permit that Obama rejected, the Trump administration would approve it, but the project may get caught up in the same local fights it did the first time, said Erika Coombs, an analyst at BTU Analytics LLC.
Reapplying through the State Department may also entail updating previous environmental reviews, which would be expensive, Coombs said. "It’s not going to be easier the second time."

Project Risk

In Canada, Kinder Morgan Inc.’s Trans Mountain expansion and Enbridge Inc.’s Line 3 replacement were approved earlier this month. That comes as TransCanada’s Energy East pipeline remains mired in regulatory hearings and opposition from environmentalists.
Calgary-based TransCanada may not want to grapple with two controversial projects simultaneously, Coombs said. In addition, with Kinder Morgan and Enbridge projects gaining approval, TransCanada could have a tougher time securing necessary contract volumes for Keystone.
"The economic incentive isn’t as strong as it once was," she said.
Viewed against the backdrop of Energy Transfer Partners LP’s controversial Dakota Access Pipeline, Keystone is poised to be a public-relations nightmare if TransCanada pursues it, said Height’s Bays.
"Keystone would be an easier project if it had either a lot of political support at the local level or a very strong economic argument," Bays said. "And both of those issues are kind of lukewarm."
Meenal Vamburkar.

domingo, 22 de mayo de 2016

Southeastern Barents Sea: Norway new oil and gas drilling.


OSLO—Norway’s government awarded its first new oil and gas acreage in more than two decades Wednesday, allowing drilling in an area previously disputed with Russia andcontinuing a push into the Arctic despite cost challenges and weak profitability in the sector.
“Today, we are opening a new chapter in the history of the Norwegian petroleum industry,” said Tord Lien, Norway’s minister of petroleum and energy. “For the first time in 20 years, we offer new acreage for exploration.”
Announcing the country’s 23rd licensing round in five decades, the government offered 10 drilling licenses to 13 different companies, including ConocoPhillips, Chevron, Statoil,and DEA. Attractive acreage is key to ensure long-term drilling activity, it said.
“This is a cornerstone of the government’s petroleum policy and is particularly important in the current challenging times for the industry,” the government said.
Three out of the 10 new licenses were awarded in a previously disputed area with Russia in the southeast Barents Sea, in the wake of a 2010 delineation deal between the two countries, following four decades of disagreement.
One of the licenses in the southeast Barents Sea borders Russia, and will be operated byDet Norske Oljeselskap ASA with a 40% stake. Russia’s Lukoil was offered a 20% stake in the license, and Statoil ASA (STO) and Petoro were offered similar stakes, the government said.
Statoil, Norway’s dominant oil company and 67%-owned by the government, was awarded the operating rights on four of the new licenses. Lundin Petroleum AB was awarded three, while Capricorn Norge, Centrica PLC and Det Norske Oljeselskap were offered one each.
“Gradually opening up new areas is crucial for us to maintain profitable and high-level production up to and beyond 2030,” said Arne Sigve Nylund, Statoil’s head of development and production in Norway.
Sweden’s Lundin Petroleum AB said it had been awarded stakes in five Barents Sea licenses, and estimated that some of the prospects in the area could have a resource potential of more than a billion barrels of oil equivalent.
“I am particularly excited about the billion-barrel prospectivity on the acreage awarded in the southeastern Barents Sea,” said Kristin Faerovik, managing director of Lundin Norway.
Norway is keen to maintain stable offshore activity as oil companies are reducing investments amid weak oil prices. The country has lost 25,000 oil-related jobs between 2013 and 2015, or 11% of its oil-related workforce, according to Statistics Norway.

domingo, 24 de abril de 2016

MR. DAVID ROTHKOPF, EDITOR, “FOREIGN POLICY” (Interview April 2016)


MEGAN THOMPSON, PBS ANCHOR: Saudi Arabia is the world’s number two oil producer behind the U.S. and has the second-largest oil reserves after Venezuela. But a slump in global oil prices has Saudi Arabia rethinking its near-total dependence on oil revenue. Tomorrow, the monarchy’s expected to unveil a new vision for economic and possibly political reform.
Joining me here to discuss that is David Rothkopf, the editor of “Foreign Policy” magazine. Thank you so much for being here.
DAVID ROTHKOPF, EDITOR, “FOREIGN POLICY”: My pleasure.
MEGAN THOMPSON: So how is it that Saudi Arabia might be planning to wean itself off its near total dependence on oil revenues? What do we expect might be unveiled tomorrow?
DAVID ROTHKOPF: Well, I think they’re following the lead of some of their neighbors. A year ago, the United Arab Emirates announced a plan to move off of oil. They’ve been actually on this track for some time. I think they’ve gotten their economy down to less than 30 percent dependent on oil and are heading for even lower.
Why? Because when you’re dependent on oil, you’re vulnerable to oil markets. And the Saudis felt this very hard last year. It produced – falling oil prices produced huge deficit. Really squeezed the economy and reduced their leverage globally in a number of other ways.
MEGAN THOMPSON: Do we know anything about the specific steps they’re going to take economically?
DAVID ROTHKOPF: We’ve seen some indications that they’re going to move away from subsidies as they’ve done for gasoline, that they’re going to move toward diversification of the economy, supporting other industries. You may also see certain kinds of political and social reforms. The son of the king, Mohammed Bin Salman, just did an interview in Bloomberg Businessweek in which he talked about how in the day of the Mohammed, women had the right to ride a camel, so why wouldn’t it be that they had the right to drive a car?
That may seem commonsensical, but it certainly is a departure from the policies that you’ve seen in the past.
MEGAN THOMPSON: Can you talk a little bit more about Prince Mohammed? What’s his reputation, and how do you think the reforms are going to be taken publicly?
DAVID ROTHKOPF: His reputation is growing. You know, when his father came in, it was like, well, who’s this kid and what’s – what’s going on? But behind the scenes, he’d been a big player and had a relationship with the prior king and had really tried to voice his influence, which produced some resentment.
But now that he’s in power, he has won a great deal of respect. And in fact, one of the most reliable diplomats I know in the region said to me yesterday after having spent some time with him that he’s the real deal. That this is a serious person with a serious agenda, real influence, and the ability to get things done.
MEGAN THOMPSON: Has Saudi Arabia’s relationship with the United States affected this push for reforms?
DAVID ROTHKOPF: You know, you can tell when you talk to Saudi leaders that they’re looking at their watches, they’re waiting for November. They want to be done with this because they really see the primary Obama policy in the Middle East over the course of the past several years being a shift from the traditional partnership with Saudi Arabia and the Gulf towards an opening to Iran. Iran is the Saudi rival of rivals. This has been painful for them.
They don’t like the Obama policies; they hope that a new administration – perhaps a Hillary Clinton administration – may be a little bit more balanced in their views than the Obama administration has been.
But I think they’re also feeling the squeeze because both from the U.S. and from Europe, the policies that they’ve had, some of their past support for unsavory characters, their justice system as you mentioned earlier, their views toward women, have really made them an outlier. And I think that if they wish to become the leader in the region, they’re going to need to make some of these changes happen on a social level and not just on an energy policy level.
MEGAN THOMPSON: All right David Rothkopf from “Foreign Policy” magazine, thank you so much for being here.
DAVID ROTHKOPF: My pleasure.

viernes, 22 de enero de 2016

The slump in the oil price that has lasted 18 months is now the worst in post-war history, says the Daily Telegraph.


The slump in the oil price that has lasted 18 months is now the worst in post-war history, says the Daily Telegraph.
After an initial dive to well below $28 a barrel on Monday, international benchmark Brent crude rose through the afternoon and settled overnight at close to $30. This bore out predictions that removing the uncertainty over the lifting of economic sanctions on Iran would spark a modest rally.
But the prevailing advice of most observers, articulated last week by Tyche Capital Advisors in New York, is to sell "any and all rallies" as a global glut continues to dominate sentiment. Traders appear to be taking that on board: in early trading in London, the price of Brent had slipped towards $29 a barrel and was heading lower.
The imminent removal of international sanctions on Iran is about to see a new flood of oil into an already oversupplied market. The Financial Times notes the head of the country's national oil company has already ordered an increase in output of 500,000 barrels a day and that 50 million barrels that had been held in reserve were already on tankers ready to be shipped to buyers in Europe.
This ramping up of output from a country with the fourth-largest proven oil reserves in the world is one reason cited by the International Energy Agency in its latest incredibly bearish forecast for prices this year. It said this would more than counter the fall in US production and keep supply 1.5 million barrels ahead of demand throughout 2016.
In short, it predicted that the world "could drown in oversupply" and that "enormous strain" on prices would be maintained, says FastFT. Predictions are for oil to fall to between $25 and $10 a barrel this year, before recovering.
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Oil price could still be as low as $25 in a year's time

18 January
Oil prices fell sharply overnight and touched a near 13-year low as the US and EU prepared to lift international sanctions on dormant oil power Iran earlier than expected.
In a market already flooded with excess supply that has pushed onshore reserves to record levels and driven prices ever lower, Iranian exports ramping up – it has pledged to add 500,000 barrels a day immediately and a million within six months – is seen as an extremely bearish signal. International benchmark Brent crude fell to $27.70 overnight, its lowest level since 2003.
This process could begin very shortly and perhaps as soon as the end of this month. A United Nations agency tasked with overseeing Iran's compliance with its deal to curtail its nuclear programme, a precondition to removing sanctions, said yesterday the country had met all of the required terms.
Ric Spooner, chief market analyst at CMC Markets, told the BBC Iran has "quite a large storage of oil at the moment" and can "increase supply quite quickly". Some reckon it already has buyers lined up in Europe, where a fierce price war with regional rival Saudi Arabia, one of the biggest oil producers in the world, is beginning to take shape.
However, several analysts were arguing there might be a price rise on Monday in a "sell the rumour, buy the fact" move that would reflect the removal of uncertainty on Iran. Some others predicted prices would at least hold steady. "The Iran deal should not be a surprise to the market and has been expected for a long time," Amrita Sen, of consultancy Energy Aspects, said.
After the fall overnight, Brent crude had recovered around $1 per barrel to $28.60 in London this morning.
Ultimately, though, the oversupply issue still dominates. New exports will add to global supplies that are one to two million barrels a day in excess of consumption, at a time when demand could be hit by a slowing of the global economy and oil producers in the Middle East and elsewhere are in discord on policies to stop the slump.
This had led to predictions of a short-term fall to $25, $20 or even $10 a barrel and prices could remain at painful lows for longer.
HSBC chief executive Stuart Gulliver said he expected the price of oil in a year's time to have settled between a high of $40 and a low of $25 a barrel, well below currently predicted averages for the next 12 months.

Oil price: sell 'any and all rallies' as Iran prepares to pump

15 January
The oil price fell below $30 a barrel for the third consecutive day today, as yet another rally that had taken hold on Thursday fell away.
International benchmark Brent crude was modestly below $30 as it continued a slide that set in yesterday afternoon in New York and overnight in Asia. Earlier on Thursday, the price had risen to well in excess of $31, still low by historical standards but welcome relief from the bearish run, before the prevailing negative trend set back in.
The market is still gripped by oversupply. The US's primary crude oil facility, in Cushing, Oklahoma, is stuffed with a record stockpile of 64 million barrels, The Economist notes, while in other areas around the world - including, critically, China - storage facilities are so full that millions of barrels are floating offshore in tankers.
And then there is Iran.
The United Nations' international nuclear agency is expected to confirm on Monday that the republic has met the conditions of its deal struck with the US last year, says The Times. This will lead to the removal of sanctions inhibiting oil exports coming perhaps as early as the end of this month and as many as a further 500,000 to one million barrels a day flooding the market within six months.
Amid a breakdown in relations with its regional rival Saudi Arabia, the largest oil producer in the world, this is likely to undermine any hopes of a deal to limit excess output.
"We feel the Saudis will pump even more and a price war between them and the Iranians will drive us well into the $20 levels. We are sellers of any and all rallies in days and weeks to come," Tariq Zahir, at New York's Tyche Capital Advisors, told Reuters.
The one bright spot on the horizon is a slowing of production in Russia, another of the world's largest producers, which has also been fuelling an export war with Saudi Arabia. "The oil-pipeline monopoly Transneft said Russian companies are likely to cut crude shipments by 6.4 per cent over the course of 2016," writes Ambrose Evans-Pritchard in the Daily Telegraph.
As the journalist adds, the key question is "whether the production cuts are purely driven by markets or whether it is in part a political move to pave the way for a deal with Saudi Arabia".

Oil price falls below $30 with no end to slump in sight

14 January
The oil price trend has been volatile for several trading sessions, with strong intra-day rallies typically giving way to late sell-offs that are contributing to a steady, cumulative decline.

Yesterday, after hitting a high close to $33 a barrel, the international benchmark Brent crude at one point fell below $30 a barrel in New York. It has since recovered slightly but at just 20 cents above $30, the price remains around the 12-year low reached last week and almost all predictions are for further steep falls to come.
Unsurprisingly, it was new data that evidenced the stubborn global oil-supply glut that precipitated the latest slide. The international energy watchdog reported that output around the world grew by 200,000 last week, the Daily Telegraph notes, even as the market is already producing one to two million more barrels a day more than is being consumed.
The International Energy Agency also revealed Russian exports reached a post-Soviet era high last year. The country is one of several major producers around the world - including the de facto leader of the powerful Opec cartel Saudi Arabia - locked in an internecine battle for market share.
Elsewhere, the US energy watchdog said the country's reserves of oil derivative products surged last week. An 8.6 million barrel rise in stockpiles of petrol in particular added to a 10.6 million barrel lift the week before, constituting whatCNBC describes as "an unheard of two-week build".
As important, the Energy Information Administration reported a second consecutive week of modest growth in shale oil output, taking overall US supply up to 9.23 million barrels a day. The production turf war was supposed to have clipped the wings of the sector and thus eventually prompted a rebalancing of the market.
All in all, the picture remains extremely bearish, especially when the political ructions in the Middle East, which will undermine any cohesive response to the glut, are factored in. Analysts have said prices will fall to $25, $20 or even as low as $10 a barrel in the coming months.
This will push petrol prices to ever lower levels in 2016, the RAC claims. If oil reaches $10, it expects the cheapest petrol in the UK to be sold for around 86p a litre, below the level of most supermarket bottled water.

Oil price slump: as BP cuts jobs, does North Sea oil have a future?

13 January
BP has announced plans to shed about 600 jobs from its operations in the North Sea, part of a new set of cutbacks that will see 4,000 staff go globally.
Blaming low oil prices, the company said it was taking the step in the face of "toughening market conditions", but added it remained committed to the North Sea.
So what does the news mean about the wider sector?
What is behind the move?
Oil prices have been hit by a combination of oversupply, weak global demand, Middle East unrest and the strong US dollar. Despite recovering from its latest slump yesterday and overnight, the international benchmark is near a 12-year low at $31.50 a barrel, a painfully unprofitable price for much North Sea production, where it costs an average of $50 to extract a barrel of oil.
This has had disastrous results for the sector, threatening an industry that employs more than 375,000 people and was, until recently, one of the richest sources of tax revenue for the Exchequer.
What are the current production levels in the North Sea
Despite "toughening market conditions", oil production in the UK Continental Shelf last year rose by 8 per cent on 2014, according to trade body Oil & Gas UK. This bucked a 15-year trend of falling oil and gas production in the North Sea, but Oil & Gas UK believes the news will do little to improve belief in the sector.
The increase is actually simply a function of investments made anywhere up to a decade ago, when prices were projected to be much higher. "The fact is, the value of our product has more than halved. Times are really tough for this industry and for the people working in it," said Deirdre Michie, chief executive of Oil & Gas UK.
How long will the increase last?
Brendan Warn, senior oil and gas analyst at BMO Capital Markets, said the increase in production was only a result of investment decisions taken years before prices plunged and that as they have fallen, investment in new wells has been withdrawn. This lag means "North Sea oil and gas production news headlines will be horrendous in the 2017-20 time period".
What does this mean for the future
Though BP says it remains committed to North Sea oil, companies are expected to drill just six exploration wells in the area this year, the lowest number since 1964, with the result that as decades-old fields run dry, there will be fewer new projects to replace them, pushing the North Sea closer to terminal decline, say experts.

Oil price: predictions of fall to $16 - and even $10

12 January
Oil prices have fallen sharply again – and the latest range of investment bank forecasts has them dropping as low as $10 a barrel before finally bouncing back.
Turmoil on the Chinese markets, a strong dollar and more evidence of global supply remaining high despite an already heavily overstocked market prompted oil to fall sharply yesterday to a 12-year low. International benchmark Brent crude touched a low of $30.43 a barrel before steadying - and it had pared losses to a little below $30.90 this morning in London.
At its nadir, overnight oil fell close to 8 per cent from where it had been in London earlier in the day.
Primarily to blame was the 14 per cent slump on China's markets this year, which is being driven by concerns over growth that could ultimately hit oil demand. The stronger dollar also makes oil more expensive in overseas territories.
Reuters notes that another key factor was leaked data suggesting Iraq's oil output from its southern territories has increased 8 per cent and that total exports could reach a record 3.6 million barrels a day in February. The country is now the second-largest producer in the powerful Opec cartel, adding to concerns the bloc will not make cuts to support higher prices.
With reserves at record levels, investment banks are revising their already pessimistic forecasts lower. The Financial Times says Morgan Stanley has become the latest bank to predict prices would fall to $20, while Royal Bank of Scotland credit analysts capped an ultra-bearish forecast for markets with a call for a low of $16 – and Standard Chartered said the market could reach $10.
"We think prices could fall as low as $10 [a barrel] before most of the money managers in the market conceded that matters had gone too far," the bank said.
It is hard to see how anything more than a brief relief rally will materialise in the near future to prevent further sharp falls. One possibility is the hint by Nigerian officials that there may be an emergency meeting of Opec that, if it yielded a production cut, could prompt a major bounce as fund managers "cover" heavy bets on prices going lower. This is, however, seen as unlikely.