ENERGY NEWS
11
OCTOBER 2021
UK NORTH SEA
Energy Review By Tsvetana Paraskova
The state of the UK offshore oil and gas industry and the road to decarbonisation of activities continued to be key topics in the UK North Sea industries this month.
OGUK published its annual Economic Report 2021, which showed that the UK’s offshore oil and gas industry remains a pillar of the economy. The action to tackle emissions is indisputable and OGUK is “already in action to improve the production of cleaner indigenous oil and gas while putting our skills to work to help other sectors transform.” However, the report also showed the stark choices the UK faces in the energy transition, considering that in the first few months of 2021, the UK has imported more gas than any other year, as demand rose and domestic production fell. And while renewables have made inroads in supporting electricity generation, that electricity still only accounts for 20% of the UK’s total primary energy needs, OGUK notes. “With a managed, fair and inclusive transition, we can be confident of our collective path to deliver net zero, but we need all parties to work with us and to actively support us in our commitments and endeavours,” said Deirdre Michie, Chief Executive OGUK. This year, the oil and gas sector is estimated to support £31.1 billion of gross value added (GVA), or 1.7% of the UK total, OGUK said in the report. This means that every £1 million spent by the oil and gas sector is estimated to support around £2.5 million of activity in other parts of the economy. Additionally, the UK energy services sector is a major exporter of oilfield goods and services and is valued at £60 billion over the five years prior to the pandemic.
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Industry activity is estimated to support almost 200,000 jobs in 2021, spanning every region of the UK, while industry is set to contribute £1.7 billion in net tax payments between 2021 and 2026, OGUK’s report showed. The Economic Report showed that £3.7 billion in capital investment was committed in 2020, despite the challenging economic environment due to the pandemic. A total of £21 billion is expected to be invested over the next five years, delivering 2.7 billion boe over time.
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