UK Oil & Gas Industry Further Invests in Oil Production
The UK oil and gas industry continues in a practical and effective manner to respond to calls for additional investment in global oil production and refining capacity.
The UK Offshore Operators Association (UKOOA) reports that UK oil and gas producers are playing their part and investing hard in the mature North Sea to maximize recovery of the country's reserves, estimated to be up to 28 billion barrels.
It adds however that he industry's efforts to stem the rate of UK production decline would be derailed by further tax hits, poor regulation and escalating costs.
Malcolm Webb, Chief Executive of industry trade body, UKOOA, points out that the Chancellor recently called for additional investment in oil production, and that UK oil and gas producers are in fact already doing just that.
"Exploration of the UK continental shelf for new fields is up this year as is the number of new production wells drilled to date," states Webb. "The industry invested over £8 billion last year. This year, we expect that figure to rise by as much as 25% to £10 billion.
"The industry's efforts to stem the rate of UK production decline are paying off and current investment plans will see the rate halved to 7% per annum. This means we expect UK fields to be producing for decades to come, and in 2020 should still be meeting 65% of all our oil needs and a quarter of our gas needs."
Webb continues that if UK production does not continue, oil and gas will of course have to be imported. "Producing our own oil and gas saves this country £30 billion on its balance of trade and will generate more than £10 billion in tax for the Treasury, more than double the amount paid last year. Not only does it provide a secure source of primary energy, but is also supports over a quarter of a million jobs across the UK.
The oil and gas industry has evidently invested a total of over £330 billion since the first exploration licenses were issued more than 40 years ago, and has recovered 34 billion barrels of oil and gas from Britain's often hostile offshore environment. This, contends Webb, has been done without risking a penny of taxpayers' money but, on the contrary, earning the country more than £200 billion in tax revenues in total.
He states: "The next chapter in the industry's history is now being developed on the already considerable presence of UK expertise, goods and services in the world energy market, which can continue to grow and create wealth for many decades yet to come.
"We should therefore be doing everything possible to build on and sustain one of the UK's most remarkable post-war industrial success stories. The country's reliance on oil and gas is growing, and government forecasts suggest that by 2020, 85% of our primary energy needs will be met by these resources.
"Oil companies sustaining high levels of investment in production is only one side of the coin. The other side is for government policy makers to work with industry to create the right business climate that will support UK oil and gas production in the long term."
Helping to achieve and sustain investment in production is the fact that last month three of the North Sea's most innovative and ambitious independent oil and gas exploration and production companies joined the UKOOA as members.
Canadian subsidiary Oilexco North Sea, Texas-headquartered Newfield Exploration and British-built Dana Petroleum have taken up UKOOA membership within the last six months, bringing the total number of companies represented by the industry body to 34.
Commenting on this development Webb says that all three represent the fresh blood arriving in the North Sea today, this being businesses that are taking advantage of the improved access to UK acreage to bring state-of-the art exploration and development techniques to the chase for new oil and gas discoveries.
"There is still huge potential for business growth in the North Sea, but the risks associated with fiscal instability, inapt regulation and escalating costs remain. Industry debate on such issues is strengthened by our members' input and support, and ensures UKOOA's voice continues to represent the industry's interests.
"It is particularly important that as a representative body, UKOOA's membership reflects the diverse range of companies currently active in UK oil and gas exploration and production," Webb concludes.
This article provided courtesy of EyeForEnergy