UK gas output continues to defy forecast decline

Production from the UK continental shelf (UKCS) inched up on the year in September, in contrast to the North Sea Transition authority's (NSTA) projected fall in output this year from last production.

Gas output on the UKCS was 71.24mn m³/d in September, NSTA data show, up marginally from 71.17mn m³/d a year earlier.

Output was varied across the country's largest production hubs, with higher production at Britannia and Arran balancing the decline at other fields.

Production rose significantly on the year at Arran to 2.1mn m³/d in September, up from 0.1mn m³/d a year earlier. Similarly, there was sharp increase at Britannia to 2.1mn m³/d from 0.2mn m³/d a year earlier, because of heavy works in September 2024 at the two fields. Harbour Energy, the operator of the Britannia, experienced an "unusually high number of planned shutdowns" in 2024.

Meanwhile, production declined at the UK's largest fields — Culzean, Elgin, Franklin, Cygnus, Bruce and Tolmount — with the biggest production decrease at Bruce. Bruce production fell to 2.8mn m³/d from 4.4mn m³/d a year earlier.

Marginally higher production coupled with lower domestic consumption on the year meant that UKCS output met a larger share of demand than in September 2024.

UK demand fell to 107.4mn m³/d in September, from 116.4mn m³/d a year earlier. UK output in September met 66pc of demand, including exports to Ireland at Moffat, up from 61pc a year earlier.

Production in 2025 revised up

The NSTA increased its projection for production for 2025 and 2026 in its biannual forecast released in November.

The NSTA forecast that net gas production will continue its decline, but remain higher than previously forecast in 2025 and 2026.

The regulator expects net production of 24.6bn m³ — or 67.4mn m³/d — this year. This is up from its estimation of 24.5bn m³ in March, equivalent to 67.1mn m³/d. The NSTA also revised its net gas production figure for 2026 to 21.3bn m³, up from 21.2bn m³ in the previous forecast (see forecast table).

The NSTA revised its expected decline on the year in 2025 to 9.6pc from the previously projected 10pc. But the decline rate remains unchanged at 12pc for 2026-50. And the NSTA's projections for production in 2025-30 fall by an average of 2.3bn m³/yr.

The regulator projects that the average unit cost of gas and crude oil together will increase to £19.80 barrels of oil equivalent (boe) this year, from £19.50/boe in 2025. And it expects this cost to increase in the following years, moving up to £20.80/boe by 2030.

In its Autumn Budget, the UK government retained the energy profits levy on oil and gas profits until its scheduled end date of 31 March 2030. Alongside the budget, the government published its North Sea Future Plan, which outlined that the government will not issue new oil and gas exploration licences in the North Sea, but it will encourage firms to produce gas from areas adjacent to operating fields.

Production may surpass 2025 forecast

Implied production data suggest that UK production may decline even lower than the revised NSTA forecast states.

UKCS production totalled 21bn m³ in January-September. And based on the NSTA's projection of a total production of 24.6bn m³, this leaves 3.6bn m³ to be produced in October-December, or 39.1mn m³/d, based on NSTA data. But implied production — based on gas delivered to the national transmission system — was 79.8mn m³/d in October-November, or 4.87bn m³, already surpassing the projected annual figure for 2025.

And if the 9.6pc production decline rate is applied to actual average output of 85.43mn m³/d in October-December 2024, this would equate to an output of 77.23mn m³/d during this period, which also suggests higher total annual production of 28.1bn m³.

Operators expect strong production at certain hubs in December, further suggesting potential for production to surpass the NSTA projections. UK North Sea producer Ithaca Energy expects strong production in December on the back of new wells coming on line. An infill campaign at its Cygnus field is continuing, Ithaca said in its third-quarter results earlier this month, with the first of four wells expected to achieve production early this month.

Similarly, the operator of the Bruce hub, Serica Energy, said in its third-quarter results last month that it expects strong output from Bruce in the last two months of the year.

By Aleksandra Godlewska