Triple whammy ‘threatens UK E&P’

Low oil prices, high costs and scarce bank lending are seriously affecting oil exploration in the UK North Sea, Steve Jenkins, the chairman of the Oil & Gas Independents’ Association (OGIA) told a parliamentary select committee today.

Jenkins said current low oil prices made exploring for more oil in parts of the UK Continental Shelf unattractive, particularly with credit for new projects hard to come by.


“The breakeven in some fields is $40 a barrel … It’s not economic to develop,” Reuters quoted him telling the committee.

Oil prices have dived from over $147 a barrel last summer to around $45 today.

Jenkins said only one bank, the now government-controlled Lloyds Banking Group, was still lending to oil and gas projects in the North Sea.

“We would like more banks to lend in the North Sea,” he said.

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