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UK DATA: North Sea oil output drops 5% in five months to May

Highlights

COVID disruption seen denting output

Lockdown slump boosts oil trade balance

London — UK upstream oil production fell 5% over the first five months of 2020 to 1.11 million b/d, while a demand slump meant exports outstripped imports for a second month in a row in May, government data showed July 30.

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Crude production was down 4% on the year in the first five months, at 1.01 million b/d, with NGL production down 13% at 96,000 b/d, the Department for Business, Energy & Industrial Strategy said.

May's monthly oil output, at 1.08 million b/d, was down slightly from April, when it recovered from a low point for the year of 1.03 million b/d in March. The UK's upstream oil industry was grappling at the time with how to respond to suspected coronavirus among offshore workers, resulting in a move to minimal workforce levels in mid-March, and a likely reluctance to push production to the maximum.

UK crude production has been recovering since 2014, but remains below half of levels at the turn of the millennium.

On the trade front, exports of crude and NGLs at 2.63 million mt exceeded imports by 745,000 mt in May, unusually the second month in a row of net exports.

Total refinery intake was down 24% on the year in May, amid coronavirus lockdown measures, at 3.69 million mt.

"The last three months have seen some exceptional figures; whilst production on the UK continental shelf has been relatively stable...the patterns of refinery receipts and trade into the UK has been significantly impacted by the COVID-19 disruption," BEIS said.

"Imports of crude oil have reached record lows and are down nearly a third on the same period last year, with UK refiners making far more use of indigenously produced crude oil, up 90% compared to the previous year. Imports of petroleum products are also down to multi-year lows as a result of reduced demand for fuel in the UK during the COVID lockdown."

The International Energy Agency has forecast UK oil production to remain virtually unchanged this year at 1.12 million b/d, before a slight fall to 1.09 million b/d next year.

Note: BEIS statistics for crude and NGLs converted at 7.55 barrels/mt and 11.5 barrels/mt respectively.