A report on how the UK can maximise offshore oil and gas resources from Sir Ian Wood could have far-reaching consequences for the sector as a whole.
In the report, Wood recommends a number of improvements – many of which have already been fast-tracked for implementation by the UK Government.
If successful, these changes could result in a boost to the oil and gas industry, with resources maximised and as much as £200 billion added to the economy.
The report, which is the first review of its kind for more than 20 years, suggests numerous ways in which the UK can capitalise on residual oil and gas resources.
It was commissioned by Energy Secretary Ed Davey who explained that the industry was facing “unprecedented challenges that require new thinking” in the modern age.
Wood was charged with generating the report to highlight ways in which these challenges could be addressed; identifying a number of improvements that could be implemented.
These included looking at how exploration of oil and gas resources was handled to ensure all UK resources are fully exploited, as well as investing in the preservation of infrastructure and machinery. Using existing technology to improve recovery of oil and gas and taking a regional, rather than individual, approach to resource development to maximise value was also suggested.
With many of these improvements already earmarked for implementation, the benefits it could have for the economy are being keenly discussed.
According to the UK government, these changes would enable them to produce as much as 3-4 billion more barrels of oil – great news considering that tax revenues from oil and gas were 40% lower in 2012/13. This equates to a £4.7 billion reduction on previous figures; a sum the economy simply cannot afford to lose.
If the changes have the desired effect then this deficit will be tackled with an extra £200 billion potentially up for grabs.
Prime Minster David Cameron vocalised his support of the report by explaining that it’s suggestions were viable options for the UK.
“The UK government can afford to support the industry and make it profitable to extract the increasingly hard-to-reach oil and gas in the North Sea,” he said.
Sir Ian has echoed these sentiments by labelling it a “watershed opportunity” before explaining that the UK must “maximise the recovery of our hydrocarbon reserves to attract more investment” and thus boost the economy as a whole.
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