The body representing Britain's offshore energy industry expects oil and gas output in 2008 to dip to between 2.6 million and 2.7 million barrels of oil equivalent per day from 2.8 million barrels of oil a day in 2007.

Total investment in U.K. oil and gas projects is expected to increase to about $25.43 billion this year, according to Oil and Gas U.K., which represents offshore producers.

Even at current record oil prices bringing in record revenues, the industry is finding it difficult to attract investment in marginal field developments.

British oil and gas production reportedly peaked in 1999 at 4.5 million barrels a day and since has declined as fewer large fields are found.

Although there may be plenty of oil and gas left, it is just more difficult and more expensive to extract and refine.

The United Kingdom has produced 37.5 billion barrels of oil equivalent in the last 40 years and has the potential to deliver another 25 billion barrels or more over time, The Guardian reported.

Oil and gas production has resumed off India's Mumbai coast.

After a monthlong shutdown following an explosion, Reliance Industries, BG Group of U.K. and Oil and Natural Gas Corp. have resumed oil and gas production in the Panna-Mukta field off India's Mumbai coast.

"We restarted oil and gas production on the evening of July 4," an official in the consortium said.

Production, however, is restricted to about half of normal output for three weeks of necessary repairs.

The field is producing 18,000 to 20,000 barrels per day of oil compared with 40,000 barrels per day of normal production. Gas output is restricted to 2.5 million standard cubic meters per day as opposed to 5.5 in normal times.

The Panna-Mukta oil and gas field was shut June 3 for maintenance work, but when the facility was being restarted that evening, an explosion occurred at Panna process platform, killing one person.

"We were ready to start oil production around mid-June, but the sector regulator DGH advised us against doing so because it would have meant flaring of accompanying gas," the official said.

Australian firms are ready to double oil and gas production at certain fields.

Up to $1.2 billion reportedly will be spent on doubling production from the Basker Manta Gummy oil and gas field in the Gippsland Basin off the coast of Victoria state.

The BMG joint venture, shared by Anzon Australia with 40 percent and Beach Petroleum (OTCBB:BEPTF) with 30 percent, said it signed a letter of intent with BW Offshore to design, supply and operate a floating production, storage and offloading vessel for the site.

The vessel would be connected to the coast via a high-pressure pipeline, allowing the first gas sales from the project. It also would allow tankers to take on oil directly from the new facility, rather than shuttling the oil to shore for offloading.

Anzon Managing Director Andrew Young said it would be the first gas processing on an offshore vessel in Australia, as well as the first offshore ship-to-ship oil transfer.

The joint venture initially will lease the $400 million vessel from BW for five years, with an option to extend up to 15 years, and it will spend up to $1.23 billion drilling wells and completing sub-sea connections to supply the increased capacity.

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Closing oil prices, July 8, 3 p.m., London

Brent crude oil: $143.65

West Texas Intermediate crude oil: $142.89

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(e-mail: energy@upi.com)