LONDON, Sept. 30 (UPI) -- British offshore oil and natural gas reserves will stop providing a return on investments if costs continue to rise, an industry report said Tuesday.
Oil and Gas U.K., the British industry body, published its annual report Tuesday showing there may be as much as 24 billion barrels of oil equivalent left offshore, but it may require more than $1.6 trillion in investments to exploit.
It warned that operating costs on the British continental shelf were 60 percent higher than they were in 2011.
"If the current trend of rising cost continues, the British continental shelf will cease to provide a healthy return on investment and we'll feel the brunt through falling levels of activity" Oil and Gas U.K. Chief Executive Officer Malcomb Webb said in a statement.
The British economy depends on oil and natural gas for 70 percent of its energy needs and offshore reserves account for 50 percent of that total.
Analysis from energy consultant group Wood Mackenzie finds mid-term production from regional waters should hold relatively steady with around 1.3 million barrels of oil equivalent expected per day in 2018. After that, production dips below 1 million by 2023, which is less than a quarter of the peak production reached in 1999.