A British government reports finds oil and gas projects were late to deliver, though a recovery may be on the horizon, the report says. Photo by project1photography/Shutterstock
March 3 (UPI) -- Despite capital investments coming in at an all-time high, a British survey of oil and gas activity found few projects were delivered on time and under budget.
The official British Oil & Gas Authority published its five-year review of oil and gas activity for the period ending in 2016. The review found less than 25 percent of oil and gas projects were delivered on time, with most running about 10 months behind schedule.
OGA Operations Director Gunther Newcombe put a positive spin on the figures, noting investments came in at close to $50 billion over the last five years.
"This brings considerable benefits in terms of financial contribution to the economy, supporting thousands of skilled jobs and safeguarding the U.K.'s energy supply," he said in a statement.
Nevertheless, projects developed over the five-year period were on average 35 percent over budget. The government found no correlation, meanwhile, with the size of the project or its complexity.
The authority reviewed 58 projects executed during the five-year study period. Mike Tholen, the upstream policy director at the agency, said the industry will be developing new guidelines "to ensure that good practice to deliver greater performance is shared across the industry."
A North Sea review from consultant group Wood Mackenzie found more than a dozen new oil and natural gas fields are expected to enter production this year. Its latest study found spending was lower, but some of that decline could be attributed to deflation.
"We think 2017 will be a difficult year for North Sea suppliers, particularly the drilling and subsea sectors, but it will be the bottom," the group's emailed report said.
Last month, energy company EnQuest said it was on pace to start new production from the Kraken oil field in the North Sea by the second quarter after a floating production, storage and offloading vessel arrived there and was securely moored.
In January, the company reported production last year in the British waters of the North Sea was up 11.3 percent from 2015 and its highest net annual production rate since it started doing business in 2010.