Is the UK a Net Crude Oil Exporter?
Mar 12 2018 Read 746 Times
Traditionally, the UK isn't considered one of the world's oil and gas giants. Though according to the latest industry gossip, Old Blighty could be about to turn up the heat and emerge as a net exporter of global benchmark Brent crude.
While there's been plenty of talk surrounding the country's shrinking production and aging oil fields, statistics suggest that the UK is about to become a net crude oil exporter for the first time in over a decade. Not only does the milestone represent exciting financial opportunities for the UK, but it's also one of the main criteria for joining OPEC.
North Sea projects fuel British crude boom
The export boom comes in the wake of several new projects about to get underway in the North Sea. This includes BP’s ambitious 130,000-bpd Quad204 project, which is expected to process 130,000 barrels a day when the purpose-built FPSO hits peak production. It also factors in Premier Oil Plc’s Catcher 60,000-bpd fields, which is estimated to hit an output rate of 60000 barrels of oil per day by April. If all goes to plan, experts predict that the new North Sea projects could elevate Britain's crude output above 1 MMbpd. When viewed on a net trade basis, this could see overseas sales surpass imports.
“There is clear potential for the UK to return to being a net exporter again,” comments JBC, an independent oil and gas research centre.
UK hits 14-year milestone
While it's unlikely that the UK would join OPEC, a potential increase in net exports does suggest an imminent rebound in UK crude production. Between 2000 and 2014 output consistently declined, which means output of over 1 MMbpd would be a hugely positive milestone for the British oil and gas industry.
According to Bloomberg calculations based on figures from the Joint Organisations Data Initiative, the last time Britain's exports surpassed its imports was 2004. If output climbs above 1 MMbpd in 2018 it would exceed last year's figures by almost 10%.
Gulf of Mexico refiners guzzle British crude
So who's buying global benchmark Brent crude extracted from North Sea fields? Refiners in the US Gulf of Mexico are the biggest consumers, with many seeking to fill the gap that's emerged from Venezuela's shrinking industry. With British production continuing to climb and global demand set to endure, experts assert that the future is looking bright for Britain's oil industry. At least in the short term.
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