UKCS Unit Operating Costs 2018

Welcome to the Oil and Gas Authority’s UKCS Operating Costs 2018 interactive report. The cost report is based on data collected by the OGA through its annual Stewardship Survey. It has been designed to allow users to interact with certain charts and graphics, enabling greater exploration of the data and its insights.

The interactive report consists of six pages. The first three pages explore operating expenditure (OPEX), whilst the last three pages regard Unit Operating Cost (UOC). There is also a glossary page (accessed from the contents menu) which provides an explanation of elements explored in the report.

A screenshot of the first page of the report is shown below. To view the report please click here or on the image below.

A quick guide for using the digital report can be found here. A pdf version of the report can be access here.

UKCS Operating Costs

See below for the key messages from the report:

Total UKCS operating expenditure (OPEX) rose 6% in 2018, due mainly to new field activity rather than cost increases in existing fields. This activity is evident in the increase in production seen in 2018. Average unit operating cost (UOC, i.e. operating cost per barrel of oil equivalent) rose marginally, by 2%, reflecting the stable cost environment which the UKCS is now experiencing.

Over half of operators saw a decrease in their average UOC, with this improvement in cost efficiency mostly being driven by production gains. 52% of operators experienced an increase in OPEX with the weighted average increase being 24%. The weighted average decrease in OPEX was 13%.

Operating costs on the UKCS are dominated by five main operators, which comprise approximately half of OPEX spend in 2017 and 2018 (out of 30 operators with operating costs in these years).

Looking forward, OPEX is expected to rise 2% (6% in nominal terms) by 2020. This increase is largely caused by new fields coming online (post 2017 start-ups). Following 2020, total OPEX is expected to fall at average rate of 3% per annum (2% in nominal terms), due to a combination of fields ceasing production and a decrease from what is predicted to be a year of high activity in 2020.

The OGA’s medium term projections suggest UOC will steadily rise, increasing 10% over the next five years to £12.8/boe (2018, real prices). This is influenced by production decline rather than cost inflation. This projection is still within the OGA’s KPI envelope for Unit Operating Cost and is over 20% lower than the 2014 level in both real and nominal terms. This emphasises the ability of industry to maintain a stable cost environment.

UKCS operators have embraced the 'lower forever' mindset by keeping operating expenditure down in the near to medium term. The UKCS is now a competitive market for investors, where along with traditional oil and gas projects, a variety of other energy related investment opportunities are beginning to arise, such as carbon capture and storage (CCS) and gas to wire projects which will help to support the UK's energy transition to be net-zero in carbon emissions by 2050.

Note: UKCS-level data on outturn and projected production, OPEX and UOC are consistent with the OGA’s March 2019 projections published here. Lower-level analyses of production, OPEX and UOC (by region or infrastructure type, for example) use “raw” data as reported by operators of sanctioned activities in the 2018 UK Stewardship Survey.

We are constantly improving the way we analyse and report the data we collect. If you have any feedback or suggestions for improvement please send them to

The 2017 report can be accessed here