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Industry in Focus: Oil and Gas in the UK

Posted by Esther Akers on Nov 8, 2013 12:05:08 PM


    

Why the UK oil and gas sector is important (portrait version)

Headline Statistics in the UK Oil and Gas Sector

  • 400,000 people are employed in the upstream oil and gas industry in the UK
  • Oil and gas supply chain sales were £27bn in 2011
  • The North Sea provides nearly half of the UK's energy needs
  • Capital investment was expected to increase from £11.5bn in 2012 to £14bn in 2013.

What is the UK Strategy for Oil and Gas?

In March 2013, the Department for Business, Innovation & Skills and Department of Energy & Climate Change published the UK oil and gas industrial strategy: business and government action plan. This policy paper laid out the future of the oil and gas industry within the UK.

The strategy focuses on three strategic aims:

  1. To maximise the economic production of the UK's offshore oil and gas resources
  2. To sustain and promote the growth of the UK industry's supply chain, in both domestic and international marketing
  3. To promote purposeful collaboration across industry and between industry and Government

Maximise the economic production of the UK's offshore oil and gas resources

The report indicates that by 2040 the UK's energy needs will still be 70% reliant on oil and gas so it is seen as critical that the UK is able to maximise the recovery the UK's oil and gas. Having a secure, reliable domestic source of energy makes the UK more resilient to changes in the global energy market which is why both offshore and "onshore unconventional resources" are important to the nation's energy security.

It should come as no surprise that one of the Governments other motivations is the taxation that it is able to generate through oil and gas extraction. Keeping the pumps working on the United Kingdom Continental Shelf can provide a welcome addition to the Treasury's coffers; in fact, projects announced in 2011 and 2012 will generate an additional £25bn in tax.

Sustain and promote the growth of the UK industry's supply chain

The UK supply chain for the oil and gas industry contains 1,100 companies (of which Mirage are proud be one) with a combined revenue of £27bn in 2011. The benefits this supply chain affords the UK, such as employment and taxation, are invaluable to the nation as a whole.

The supply chain is well-positioned within the global industry also. The UK "is internationally recognised as a  global leader in subsea engineering and a centre of excellence in project management, design engineering, asset and operational management, design and manufacturing of advanced equipment, research and development, safety management training and education and professional and financial services."

Promote purposeful collaboration across industry and between industry and Government

The challenges facing the basin have continually evolved. Future discoveries and average field sizes will
be more technically and commercially challenging and new markets such as decommissioning will emerge. In order to align with the shifting dynamics of the basin, industry will need to collaborate further.

The Government needs to work closer with the industry through bodies such as UK Trade and Investment to support the export ambitions of the industry.

What does this mean for Mirage?

As a supplier to the UK oil and gas industry and a part of the Acteon group we find these words to be encouraging. Along with wider Acteon group, we consider ourselves to be at the forefront of our industry and as we continue to grow our business in the UK, it is reassuring to know the UKTI is supporting supply chain firms such as ours within the international market.

Topics: Oil news

   

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