Belfast Telegraph

Wednesday 1 October 2014

Oil investment at 30-year high

Investment in North Sea oil and gas is at a 30-year high, a report says

Investment in the North Sea oil and gas industry is at its highest for over 30 years, according to a report.

The Oil & Gas UK 2013 Activity Survey, published today, said there was £11.4 billion investment in the UK's oil and gas sector in 2012, a figure which is expected to rise to at least £13 billion this year.

It said the number of projects submitted to the Department of Energy and Climate Change (DECC) and given development approval almost doubled between 2011 and 2012.

Oil & Gas UK said the prospect of large-scale investment highlights the potential for the UK's offshore oil and gas sector to boost economic activity and contribute to the country's prosperity in future years.

Malcolm Webb, Oil & Gas UK's chief executive, said: "Here is some really good news for the UK. After two disappointing years brought about by tax uncertainty and consequent low investment, the UK continental shelf (UKCS) is now benefiting from record investment in new developments and in existing assets and infrastructure, the strongest for more than three decades.

"The recent introduction of targeted tax allowances to promote the development of a range of difficult projects, coupled with the government's ground-breaking commitment to provide certainty on decommissioning tax relief, has prompted global companies and independent businesses alike to take another look at the UK as an investment destination and resulted in a new wave of investment. It is crucial that we sustain this momentum in the years ahead."

Energy Minister Fergus Ewing said: "This report confirms that Scotland's oil and gas sector is going from strength to strength. "It shows considerable industry investment at a level unparalleled in our economy, in both new developments and existing assets, and also in infrastructure - the strongest for more than three decades.

"The report shows the continued importance of the North Seas within the energy world. The oil and gas sector is vitally important to Scotland's economy and, with more than half of the value of the North Sea's oil and gas reserves yet to be extracted, up to 24 billion recoverable barrels with a potential wholesale value of £1.5 trillion, oil and gas will remain an enormous economic resource for decades to come."

Lang Banks, director of environmental charity WWF Scotland, said: "While it is true that the oil and gas industry is and will continue to be for some time a major contributor to our economy, Scotland should really be setting out a plan to transition away from dirty fossil fuels.

"We need to see a transition that enable us to harness the engineering skills currently deployed in the oil and gas industry and apply them to supporting a range of cleaner forms of energy production. One thing we do know is that the planet certainly can't afford to allow all the oil left in the North Sea to be burned."

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