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Baseefa Ltd

Oil & Gas UK statement on Scottish Referendum result

19 September 2014

Oil & Gas UK, the representative organisation for the UK offshore oil and gas industry, issued the following statement on the Scottish Referendum result:

In light of the ‘No’ vote in the Scottish Referendum, Oil & Gas UK looks forward to continuing working closely with both the UK and Scottish Governments towards the shared ambition of maximising economic recovery of the UK’s offshore oil and gas resource.

This vote does not and will not diminish the pivotal role played by the Scottish Government in supporting the offshore oil and gas industry and Oil & Gas UK looks for this to continue.

Malcolm Webb, Oil & Gas UK Chief Executive, said:  “The Referendum campaign rightly revealed the important role the offshore oil and gas industry plays in our economy, both in Scotland and in the rest of the United Kingdom.  This is understandable given this industry remains the UK’s largest corporate taxpayer and largest industrial investor, and its crucial role in helping assure thousands of well-paid highly skilled jobs as well as our energy security.

“To safeguard the industry’s future, it is particularly important that that the government now presses swiftly ahead with fiscal reform as well as the implementation of Sir Ian Wood’s recommendations to maximise the economic recovery of our oil and gas resource.  The industry must not delay either in a cross-sector effort to bring its escalating costs under control.

“There has been a great deal of discussion about how much oil and gas resource remains to be produced from the UK continental shelf.  Oil & Gas UK’s position remains that there could be between 12 – 24 billion barrels of oil and gas still to recover but that the above three pivotal challenges need to be resolved if we are to stand any chance of reaching the top half of this range.

“We will continue to work with both UK and Scottish Governments on our mutual goals.  This is not just to maximise the economic recovery of the substantial remaining potential of the UKCS oil and gas resource but also to strengthen its supply chain across Scotland and in all other parts of the United Kingdom.”

UK offshore oil and gas – key facts

•  There has been around 50 years of exploration and production on the UK Continental Shelf.
•  The UK offshore oil and gas industry is the country’s largest industrial investor, paying more tax into the Exchequer than any other corporate sector.
•  Over £500 billion has been spent to date on exploration and developments and 52 million barrels of oil and gas have recovered so far from the UKCS.

Present day
•  Oil and gas provides some 70 per cent of the UK’s total primary energy.
•  450, 000 jobs are supported by the industry.
•  The UK upstream oil and gas supply chain generates turnover of more than £35 billion in 2012.
•  The UK Continental Shelf is seeing record capital investment with £14.4 invested in 2013.
•  Exploration over past three years is at its lowest in UKCS history - only 15 exploration wells were drilled in 2013, compared with 2008 when 44 exploration wells drilled.
•  Operating costs rose by 15.5 per cent to an all-time record of £8.9 billion in 2013 and are anticipated to rise further to around £9.6 billion in 2014.

•  In 2030, 70 per cent of the UK’s total primary energy will still come from oil and gas.
•  Between 12 and 24 billion barrels of oil equivalent remain to be extracted from the UK Continental Shelf.
•  Sir Ian Wood’s report provides a blueprint to maximise economic recovery from the UK Continental Shelf - this can only be brought about through collaboration.

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