OIL & Gas UK has said the next UK government must deliver on four key priorities if it is to secure the future of the North Sea oil and gas industry.
The group’s blueprint for the future of the North Sea, which follows the Vision 2035 report in January, shows how the industry has the potential to boost the UK economy by almost £300 billion.
Deirdre Michie, chief executive of Oil & Gas UK (OGUK), said: “Against the backdrop of a busy political environment and a difficult operating climate for the industry, we urge the next UK Government to support our sector through our four key asks.”
Key to this is the establishment of an energy policy which OGUK said would realise the full benefits of the UK’s resources.
Ms Michie said this should be an integrated, comprehensive policy that brings together all the various sectors in the industry.
“We know that demand for energy is going to increase, we know oil and gas needs to be part of that demand, we know we have to satisfy emission reductions, so what would be very helpful would be to see how that could all be pulled together into an integrated plan,” she said.
OGUK also said the Government must ensure the UK continental shelf receives sufficient investment to maintain its competitiveness on a global scale. It must also ensure Brexit negotiations support the development of the industry.
“In terms of our Brexit messaging, we’re pretty clear there should be frictionless access to markets, people and goods; as well as having a strong voice in Europe,” said Ms Michie.
The group also said workers and operators in the sector must be protected.
Delivering these plans, it said, could deliver £290bn for the UK economy over the next 20 years. “Our blueprint details the steps our political leaders should take to help sustain our industry, which continues to help secure the UK’s energy needs and supports hundreds of thousands of jobs.”
OGUK said the blueprint would ensure the industry is still a significant producer in 2035.
Ms Michie said the plans were realistic and just required the next government, and industry, to “get on with it”.
“What we’re putting forward are practical and pragmatic approaches. Some are opportunities, some are challenges, but we do think they are doable.”
She said that the increase in production over the last three years is “extraordinary”, but there remain concerns over the future of the basin beyond 2020.
“There is a worry that you get to the point where fresh investment hasn’t come through and hasn’t brought in new exploration, which leads to appraisal, which leads to development,” she said. “There is a funnel that is not being filled. The concern is that production starts to go down quite dramatically.”
Ms Michie said she was cautiously optimistic about current conditions, but acknowledged that for some parts of the supply chain it is “still pretty grim”.
She said: “Companies are more efficient, costs are under control and people are beginning to feel more confident and having conversations about business, but it is cautious”.
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