Britain could produce 30 percent more oil from the North Sea by 2030 than previously expected if it invests around $25 billion (£20 billion) in this direction.
This is according to industry body Offshore Energies UK (formerly Oil and Gas UK), which earlier today published its Economy and People Report 2024. The authority also said in its report that with the right political support, investment in so-called offshore energy could rise from $16.5 billion in 2023 to more than $25 billion.
The offshore energy options OEUK spoke about included oil, gas, hydrogen, carbon capture and offshore wind.
“With supportive policies in place, the industry can deliver lasting economic value, expand supply chain capacity, preserve skilled jobs and deliver energy security whilst meeting climate targets,” Offshore Energies UK said.
Britain currently produces about 1.2 million barrels of oil equivalent a day, but that will plummet to just 700,000 barrels per day by 2030, according to forecasts by the North Sea Transition Authority, an industry regulator cited by Bloomberg.
Offshore Energies UK says continued investment in the industry could ease the decline to 900,000 bpd – 30% higher than currently forecast – but for that to happen, North Sea oil and gas operators need government support.
However, if the next government is Labour, the Conservatives are unlikely to gain support. Recent polls have predicted the Conservatives’ “political disappearance”, and this seems to be correct. There is little difference between Labour and the Conservatives on the issue of the energy transition, although the Conservatives have expressed some support for the continuation of oil and gas production, and even for the acquisition of new exploration licenses.
Meanwhile, if Labor wins the vote, it plans to further raise taxes on the oil industry and has promised to cancel new exploration licences. A Labor government would also deal a further blow to the oil industry by eliminating a special measure called “investment allowance” that exempts companies from tax as long as profits are reinvested in production.
Article by Charles Kennedy of Oilprice.com
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