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British oil production up from last year

Gains come despite concerns about post-Brexit future for energy sector.

By Daniel J. Graeber
British oil production up from last year
British government reports year-on-year gains in oil production and an overall decline on the dependency on foreign resources. Photo by project1photography/UPI

LONDON, Aug. 25 (UPI) -- The British government reported total first quarter production of natural reserves increased at the same time the country relied less on foreign imports.

The government reported total production of all energy reserves increased 4.4 percent from the first quarter of 2015.

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"Production of oil rose by 17.3 percent compared to the first quarter of 2015, due to new fields coming online, but also due to reduced production in February 2015, while production of natural gas rose by 6.0 percent," it said.

Quarterly data follows the June decision to leave the European Union, a decision met with concern from the British oil and gas industry. Deirdre Michie, the chief executive of Oil & Gas U.K., said development activity for oil and gas in British waters was already low and the industry needed to ensure the investment climate is conducive to future investments.

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Michie's group in February said that, with spending on new projects in 2016 expected to move far below the level from five years ago, there were few prospects for legacy momentum in the North Sea and elsewhere in the British energy sector.

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Less than $1.4 billion in spending on new projects is expected in 2016, compared with an average of around $7 billion in the last five years. In July, British energy company BP declared it was making good progress on resetting its capital programs. Costs for 2017 are expected to be $7 billion lower than two years ago and capital spending for full-year 2016 is expected to come in below $17 billion, after spending about $7.9 billion during the first half of the year.

BP CEO Bob Dudley, however, said a "strong pipeline of new projects" meant as much as 500,000 barrels of oil equivalent in new production was expected from the company by the end of next year.

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The British government reported total imports of energy products declined 8.8 percent from first quarter 2015.

"In the first quarter of 2016 fossil fuel dependency was 82.5 percent, down 1.5 percentage points from the first quarter of 2015," the government said.

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