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What does latest licensing round mean for UK Oil & Gas industry?

Posted by Esther Akers on Feb 21, 2014 9:23:00 AM


    

North_Sea_Oil

The government has just opened the 28th licensing round, allowing companies to apply to drill in the North Sea for offshore oil and gas. This round supports the joint Oil and Gas Industrial Strategy, which aims to secure years of investment and production in the North Sea.

With suggestions that up to 20 billion barrels of oil could be found in the sea bed, the government has had plenty of interest and applications from explorers.

The previous licensing round saw a record number of licences awarded, approving 36 offshore projects and bringing the number of companies working in the North Sea to 50.

It is thought that this round could bring further benefits to the UK. However, there have been a number of blocks omitted, in south-west of England and Moray Firth, for environmental reasons.  

Economic growth

The 36 offshore projects that went ahead last year supplied half of the UK’s primary energy demand, attracted £14 billion of capital expenditure and generated around £6.5 billion in tax revenue. The government hopes that the 28th round will achieve similar if not better figures, but warns that a skills shortage must be addressed if the economy is to continue growing.

Energy security

Oil and gas output in the UK has been on the decline since reaching its peak at the beginning of the 21st century. With shale gas still at least 10 years off – according to Vince Cable – it is important that the UK can extract whatever resources are left. This will prevent the UK becoming dependent on expensive imports.

More jobs

The unemployment rate fell to just 7.1% in January 2014, but that still leaves millions of people out of work and actively seeking employment. Good news then, as forecasts for the oil and gas industry show demand for an additional 15,000 employees over the next five years.

The sector already employs 350,000 people, almost half of which are in Scotland – suggesting that at least 7,000 of the new jobs will be north of the border. Employment is spread elsewhere with 21% in south-east England, 6% in the north-west and 5% in the West Midlands.

Applications for this round of licensing must be submitted by 25th April 2014.

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Image credit: Flickr

 

 

Topics: North Sea

   

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