BP CEO Warns UK North Sea Output On Track To Fall 5%/Year, Faster In Absence Of Increased Investment

British production in the North Sea is set to drop to levels not seen since the late 1970s, BP statistics suggested. Chief executive Tony Hayward said output will fall by at least 5% a year in the coming years, and if investment is not stepped up the declines could be even steeper.

Just 1.54m barrels of oil were produced in 2008, compared with a peak of 2.9m in 1999, and continued declines will leave output at its weakest since 1978. Combined oil and gas production has fallen to 2.6m barrels a day. 'The North Sea is a mature and declining province,' said Hayward. 'It will decline for sure at 5% per year, and if the investment doesn't go in - and this year it is not going in - it will probably decline at a faster rate.'

The report is grim news for the Treasury, which expects to generate almost £7bn of tax revenue from the North Sea this year alone.

At the current rate of production, the UK has six years of oil left and just under five years of gas, BP's annual Statistical Review of Energy showed.

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