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BP PLANS SIX PERCENT BOOST TO NORTH SEA OUTPUT

 CLEVELAND, Sept. 7 /PRNewswire/ -- British Petroleum is planning to boost its investment in the North Sea and to raise its UK production of oil and gas.
 Details of the increased spend were disclosed today by BP Managing Director John Browne who said that daily output of oil and gas from the UK North Sea as a whole could be maintained at well over two million barrels of oil equivalent until well into the next century.
 Speaking at the Offshore Europe conference in Aberdeen, Scotland, Browne said BP expected to spend an extra 10 percent in the North Sea over the next three years and to increase production by six percent by 1995.
 He said the recent changes in Petroleum Revenue Tax represented a "very important step" in evolving a fiscal regime that would allow the industry to retain a reasonable proportion of revenue on profitable development and provide the incentive to reduce costs and to work for maximum efficiency.
 The changes - combined with advances in technology and continuing reductions in development and operating costs - could usher in a step- change in productivity and ensure that the North Sea produced as much oil and gas in the future as it had to date, yielding the Government a secure income of between 2.5 billion pounds and 3.5 billion pounds annually for up to a further 20 years.
 "Our current calculation is that, given a further 30 percent reduction in capital costs and a 50 percent reduction in operating costs over the next 20 years, it is possible to raise the total volume recoverable from the North Sea by 25 percent - from around 60 billion barrels to around 75 billion barrels," Browne said.
 "The cost targets sound substantial but in fact they are little more than the cost reductions which the industry has collectively achieved since 1986, when the oil price fall triggered a fundamental reappraisal of everything that was being spent. Capital costs have fallen in that period by somewhere around $1.50 a barrel on average, or 25 percent," he said.
 Browne predicted that advances in technology would radically increase the volumes of oil and gas recoverable from individual fields. "Twenty or 25 years ago it was common to talk of mr?y rates of 30 percent. Now the industry standard is around 45 percent, a 50 percent increase. I can well believe that within another 20 years we will have come to regard recovery rates of 60, even 70 percent, as normal," he said.
 Referring to BP's own plans, Browne said: "We are preparing to increase our investment in the North Sea by almost ten percent over the next three years. In part that is a result of the extra cashflow arising from the reduction in PRT. But it is also a reflection of the fact that the budget changes make some developments more commercially attractive. Our initial estimate is that the cumulative effect of the extra investment will be to raise our UK production by more than six percent by 1995 - 80 percent of it oil."
 -0- 9/7/93
 /NOTE TO EDITORS: The full text of John Browne's speech to the Offshore Europe Conference is available on request/
 /CONTACT: Ian Fowler of BP, 216-586-4976/
 (BP)


CO: BP ST: Ohio IN: OIL SU:

BM -- CL003 -- 9175 09/07/93 08:26 EDT
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Publication:PR Newswire
Date:Sep 7, 1993
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