Reducing costs in oil production – UK North Sea producers lead the way
2026 has been a turbulent year in the oil and gas industry, so the recent news from the UK’s North Sea Transition Authority that North Sea oil production was more cost-efficient last year is welcome. According to the NSTA, spending per barrel in 2025 was 9% lower than in 2024, as the cost to produce each barrel of oil (boe) fell from £19.60 to £17.81 against a yearly average Brent Crude price of £52.33. This is good news for the industry in volatile times, but the NSTA has indicated that costs in 2026-27 are likely to rise so it is vital that oil and gas operators remain focused on reducing costs and increasing innovation.
Why have production costs fallen?
The NSTA’s UKCS Unit Operating Cost report, a regular benchmark for the UK’s oil and gas industry, indicates that the reduction in spending per barrel is caused by a 10% fall in OPEX spending in 2024-25. Reasons for this fall are that older, less efficient assets have come to the end of their operational lives, while newer, more efficient assets have come online, alongside the reinstatement of several wells and technology-related operational improvements. In further good news, the report reveals a one percentage point rise in production efficiency to 76%. The NSTA says reasons for this include increasing technology adoption across the industry.
Better infrastructure = higher quality assets
Ever increasing standards in oil production have led to improvements in critical areas such as welding and pipe-laying, which has led to new assets that are installed more efficiently and last for longer. Companies such as OMS provide third-party measurement, inspection and remediation services that help oil producers meet stringent project standards while also improving pipeline installation processes and limiting future OPEX spending.
Measurement, inspection and remediation
At OMS our technology and services are focused on improving efficiency – helping clients improve installation while also increasing quality. We have been providing pipe-end measurement and fit-up services to countless global oil production clients for more than 20 years. Our award-winning Autotool laser measurement system and SmartFit software combines to offer the best pipe fit-up on the market, helping clients match and sequence pipe, reduce HiLo, improve weld quality, meet standards and speed up installation. Our weld inspection and remediation systems help clients identify weld problems and resolve them at an early stage, improving pipeline resilience and saving money at the critical pipe-lay stage, where every second costs.
Innovation is vital for increasing efficiency
OMS AGILITY robotic crawler
Although the increase in production efficiency is welcome, 76% remains below the NSTA target of 80%. Innovation is key to developing the new technologies that will help operators drive further, vital efficiency improvements, yet maintaining effective R&D can be difficult and costly. Our agile, experienced R&D team are skilled at understanding and forecasting client need, winning four prestigious King’s/Queen’s Awards since 2007. We have developed cutting edge measurement, inspection and remediation technology that uses the very best in laser sensors, advanced robotics and automation to help our clients improve process efficiency, save costs and install better assets. Constantly pushing the boundaries of what is possible and rapidly understanding what isn’t, the OMS team innovates so that our clients don’t have to.
Good news for oil production – but vital to focus on the future
The NTSA’s report is undoubtedly good news for the oil industry, yet oil producers cannot afford to rest on their laurels. With costs predicted to rise next year, further efficiency improvements are not only vital but entirely possible, especially when oil producers understand what they can achieve when working with innovation-focused companies such as OMS.
If you have a challenging project or an issue you would like to solve, our team is available to help. Contact us on info@omsmeasure.com or +44 1279 656038.