New data shows that North Sea production was more cost-efficient last year, with spending per barrel 9% lower than in 2024.
The latest North Sea Transition Authority (NSTA) report confirms that the average cost to produce a barrel of oil (boe) equivalent fell from £19.60 in 2024 to £17.81 in 2025. Meanwhile, production rates were steady at approximately 1.1 million boe per day in both years.
The NSTA said improved production efficiency, along with older, more expensive fields closing and new fields starting production, helped lower costs.
Loraine Pace, the NSTA’s Head of Performance and Planning, said: “Unit costs improved in all regions of the UK Continental Shelf in 2025, which is encouraging.
“However, with costs projected to rise slightly in 2026 and 2027, it is important that operators focus on efficiency, continue to innovate and use new technologies, and share lessons to keep a lid on costs, while continuing to undertake necessary maintenance.”
The cost reduction comes as North Sea operators face pressure to maximise production from existing assets as the UK’s domestic oil and gas output declines. The NSTA said 56 reinstated wells produced an additional 16 million boe in 2025, highlighting the growing focus on improving output from existing infrastructure.
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