In an announcement that highlights the enduring importance of the UK oil and gas industry, the Department of Energy & Climate Change (DECC) has revealed that in the latest licensing round 173 offshore applications were lodged for approximately 370 blocks.
This comes as welcome and encouraging news at a time where crude oil production has fallen to record lows in recent years.
Providing almost 50% of the UK’s energy, the British oil and gas sector also supports – directly or indirectly – more than 450,000 jobs. Positive activity in applications for these sectors signifies greater confidence in the sector after a number of years of declining activity and will go some way to ensuring jobs are secured and built upon.
The DECC will commence awarding the blocks this autumn, following intense scrutiny of the applications over the coming months.
Two thirds of known oil reserves extracted
Approximately 42 billion barrels of oil have so far been produced from UK territorial waters, with a potential 20 billion further barrels from known sources yet to be extracted. This marks more than two thirds of all known oil reserves already depleted – demonstrating how it is crucial that more widespread and detailed exploration takes place.
The news comes shortly after the DECC announced that Britain has become a net importer of oil for the first time since 1984, and average oil output is at its lowest level since 1977.
North Sea production of crude oil has seen significant declines with a number of refineries closing in recent years.
“The closure of the Coryton refinery in July 2012 was a contributory factor towards lower production in 2013. Refinery production was also weakened by increasing competition from imports,” revealed the DECC.
Investment in offshore exploration
Significant investment in offshore exploration in UK blocks will help revitalise an industry that has served the nation so steadfastly over the last 50 years.
Similarly, with more advanced technologies and tax subsidies for firms operating in High Pressure High Temperature (HPHT) fields on the UK continental shelf, currently untapped oil reserves will soon become more accessible.
Greater oil production levels will help to protect the future of the remaining UK refineries, as the pressure from overseas competition will be reduced.
News of impressive offshore block applications comes as a positive indicator that the industry is fighting back against the possibility of becoming wholly dependent on overseas oil supplies.
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