Page 4 - EurOil Week 12 2021

EurOil COMMENTARY EurOil

UK rolls out $22bn North

Sea transition deal

While the industry has welcomed the deal, it will entail greater scrutiny ahead of future

licensing rounds and an end to export financing for oil and gas projects overseas

UK THE UK has announced a long-awaited $22bn has already been implemented at a number of
North Sea transition deal, aimed at supporting offshore installations in neighbouring Norway.
WHAT: its oil and gas producers in shifting towards clean The transition deal will strive to “tackle regula-
UK has announced a fuels. tory and policy barriers” to electrification in the
North Sea transition The strategy focuses on the development of UK.
deal that would unlock fossil fuel-based hydrogen, which is considered “Our studies show how the UK Continental
$22bn in government and clean when CO2 created in the production pro- Shelf [UKCS] can provide 60% of the UK’s over-
industry funding for clean cess is captured and stored. This so-called blue all carbon reduction requirements to meet Net
energy development. hydrogen has been rejected by other European Zero 2050, through electrification, carbon cap-
countries, which only want to create green ture and storage [CCS], hydrogen and offshore
WHY: hydrogen, using renewable energy-powered wind,” upstream regulator Oil & Gas Authority
In return, the oil industry electrolysis. (OGA) CEO Andy Samuel said.
has pledged to reduce About GBP10bn of the GBP16bn ($22bn) The government has committed to installing
emissions by 10% by of industry and government investment that 40 GW of offshore wind capacity by 2030, versus
2025, 25% by 2027 and the deal envisages will go towards hydrogen. A 10 GW at present. It is also looking to establish at
50% by 2030. further GBP3bn will go towards carbon capture least two CCS clusters by the mid-2020s.
utilisation and storage (CCUS) chains.
WHAT NEXT: BP has announced plans to build the UK’s Building back better
The government will largest gas-based hydrogen production facility in In return, the UK oil industry has promised to
introduce much greater Teesside that would produce up to a fifth of the bring down its emissions by 10% by 2025, 25%
scrutiny ahead of UK’s 5-GW capacity target for hydrogen output by 2027 and 50% by 2030. It has also pledged to
future licensing rounds, by 2030. It would capture and store up to 2mn use local businesses for 50% of offshore decom-
weighing up each tonnes per year (tpy) of CO2. missioning work and new energy projects by
time whether further The final GBP3bn will be spent on replacing 2030, to support local industry.
exploration is necessary. diesel and gas-fired generators on North Sea “Today, we are sending a clear message
platforms with wind power and other renewable around the world that the UK will be a nation of
energy sources. This process of electrification clean energy as we build back better and greener

P4 www. NEWSBASE .com Week 12 25•March•2021