Page 10 - EurOil Week 36 2021

EurOil POLICY EurOil

OGUK defends further

oil, gas investment

UK THE UK oil and gas industry has defended the OGUK pointed to the risk itself, noting in its
need for further investment in exploration and report that UK oil and gas output dropped 11%
OGUK envisages as production, amid growing calls for upstream year on year to 1mn barrels of oil equivalent per
much as GBP21bn activity to be restricted as the country works to day (boepd) in the first quarter.
being invested in the decarbonise itself. “In the first few months of 2021, the UK
sector between 2021 In an economic report published on Septem- has imported more gas than any other year, as
and 2025. ber 1, Oil and Gas UK (OGUK) estimated that demand rose and domestic production fell,” it
the UK had attracted GBP3.7bn ($5.1bn) of oil said. “And while renewables have made inroads
and gas capital investment last year, marking in supporting electricity generation, that elec-
its lowest level since 1973. In the wake of the tricity still only accounts for 20% of the UK’s total
coronavirus (COVID-19) pandemic, operators primary energy needs.”
slashed capital spending plans for 2020-21 by Meanwhile, Greenpeace and other NGOs
GBP3bn, the industry association said. have taken a stand against oil and gas permitting,
OGUK envisages as much as GBP21bn being challenging on September 1 the government’s
invested in the sector between 2021 and 2025, approval for drilling at the Vorlich field, operated
resulting in the recovery of 2.7bn barrels of oil by BP and Ithaca. Greenpeace said that a victory
equivalent (boe). But it warned that so far only in this case could have implications for the larger
GBP6.6bn of that sum had been fully committed Cambo oilfield that Royal Shell and Siccar Point
by operators. Energy are looking to develop.
“OGUK is clear that there is a continued Cambo has become a focal point for environ-
need to invest in new oil and gas developments mentalists in the run-up to the UK hosting the
to ensure security of supply and a strong domes- UN COP26 conference in November.
tic industry upon which to build the low-carbon OGUK estimates that the oil and gas industry
energy ecosystem of the future,” the association supports nearly 200,000 jobs in the UK. A recent
said. “There needs to be “a managed transi- report undertaken by Scotland’s Robert Gordon
tion,” it said, adding that it “refutes the cliff edge University found that most of these roles could
approach being suggested by some as a symbolic be transferred to emerging low-carbon energy
gesture.” sectors.
The UK’s opposition Labour Party has The UK oil and gas industry is hoping
called for a “hard-edged timetable” to be in to improve its climate credentials through
place to cease oil and gas production. But the increased electrification of offshore facilities.
government has resisted such calls, although Crown Estate Scotland plans to launch a new
it has amended its licensing policy to incor- tender early next year specifically designed to
porate climate concerns more when licences develop wind projects that can decarbonise oil
are issued. and gas platforms. More information will be
The UK’s independent Climate Change Com- made available in November.
mittee estimates that around half of the country’s “Power generation accounts for around two-
energy requirements between now and 2050 will thirds of oil and gas production emissions,” the
still be covered by oil and gas. Industry veterans Oil and Gas Authority (OGA)’s director of oper-
like Ian Wood have warned that calling time on ations, Scott Robertson, said. “The electrification
oil exploration would hurt the environment, as of oil and gas installations is vital if industry is
the UK will be forced to import more energy going to meet its 2027 and 2030 decarbonisa-
over long distances from countries with lower tion targets agreed to the North Sea Transition
levels of environmental standards. Deal.”™

P10 www. NEWSBASE .com Week 36 09•September•2021