Page 5 - EurOil Week 12 2021

EurOil COMMENTARY EurOil

from the pandemic,” UK Business and Energy 2050.”
Secretary Kwasi Kwarteng commented. “We will “It will unlock billions of pounds of invest-
not leave oil and gas workers behind in the UK’s ment and see government and industry work
irreversible shift away from fossil fuels. Through together to deliver a home-grown energy transi-
this landmark sector deal, we will harness the tion, realising innovative low-carbon solutions
skills, capabilities and pent-up private invest- that can be exported globally,” she said.
ment potential of the oil and gas sector to power
the green industrial revolution, turning its focus Greater exploration scrutiny
to the next-generation clean technologies the The government also confirmed it would not ban
UK needs to support a green economy.” exploration licensing, as media reports claimed
The deal’s unveiling comes ahead of the UK’s earlier this month it was considering. However,
hosting of the 2021 United Nations Climate future licensing rounds will have far greater scru-
Change Conference (COP26), which will be held tiny through the use of a “climate compatibility
in Glasgow this October. The country is keen checkpoint.” This checkpoint will ensure that
to portray itself as a leader in the fight against licences are not issued that might jeopardise the
climate change, in 2019 becoming the first G7 country’s climate objectives.
nation to make a commitment to becoming a Essentially, the OGA will assess domestic oil
net-zero economy by 2050. Earlier this month and gas demand, projected production levels, the
the government signed off on funding for hydro- sector’s progress in lowering emissions and clean
gen and CCS projects in the country’s major technology development ahead of each round.
industrial clusters in Scotland, South Wales, A decision would then be taken on whether the
Merseyside, Humber and Teesside, as part of its contest should go ahead.
industrial decarbonisation strategy. “If the evidence suggests that a future licens-
The deal also aims to give the UK supply ing round would undermine the UK’s climate
chain the support to target low-carbon business goals or delivery of net zero, it will not go ahead,”
opportunities overseas, and end routine gas flar- the government said. A system of checkpoints
ing by 2030. Separately, the government said it will be designed and introduced by the end of
would review the remit and powers of offshore 2021 “through extensive engagement with a
environmental and decommissioning regulator wide range of stakeholders.”
OPRED, shifting its focus more to emissions In other bad news for the industry, the gov-
reduction. ernment said it would cease providing taxpayer
The head of industry association Oil & Gas support for supply chain export activities that
UK, Deirdre Michie, commented that the deal support oil and gas projects overseas. But it will
represented a “transformative partnership which allow a one-year grace period for small busi-
will harness the expertise of the UK offshore oil nesses to help them adjust, and will provide a
and gas industry to urgently meet the country’s “guarantee” that oilfield service firms with “cred-
climate ambitions of net-zero emissions by ible” transition plans can still obtain financing.™

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