Low oil and gas prices and production surpluses have forced companies to significantly cut operational production costs to maintain profit margins[i]. According to a new study from Rystad Energy, the United Kingdom led the world in cutting the cost of its offshore oil and gas production. For example, between 2014 and 2018 the United Kingdom cut its operational production costs by a hefty 31 percent. This compares with Norway’s cuts of 19 percent and 15 percent by the United States.
Sara Sottilotta, Oilfield Service Analyst at Rystad Energy concludes, “The reduction in operating expenditure is largely the result of offshore regions – such as the United Kingdom, Brazil, Nigeria, Angola, the Gulf of Mexico and Norway – feeling the squeeze of uncertain oil prices, which in turn has driven operators and contractors to nurture operational improvements in pursuit of lower unit prices.”