Sir Ian Wood, recently retired Chairman of the Wood Group, has published his interim report revealing the economic and energy security opportunities still available from the UK’s offshore oil and gas resources. The report entitled “UKCS Maximising Recovery Review” is the first of its kind in more than two decades. Sir Ian interviewed 40 active companies in the oil and gas industry, representing more than 95% of UK Continental Shelf ("UKCS") production, while compiling the report. He also spoke to key government figures and regulators from neighbouring countries such as Norway and the Netherlands.
Tim Bird, partner in Fieldfisher's Energy and Natural Resources Group commented: "Although shale gas may be around the corner, the offshore reserves in the UKCS are here and now as far as the UK oil and gas industry is concerned. We view the interim recommendations Sir Ian has put forward quite positively although it remains to be seen how effective the addition of another regulatory or arms length body in the energy sector will be. In any event, a strategy to maximise the recovery from the UKCS is of vital economic importance both to the UK and to the international companies operating here and we look forward to Sir Ian's final set of recommendations and how they may be taken forward by the government."
- in 2012-13 the UK oil & gas industry paid £6.5 billion in corporate taxes on production, 15% of all corporate taxes in the UK, and supports the employment of 450,000 people across the UK;
- 41 billion barrels of oil & gas have already been produced from the UKCS and 20 billion or more could still to be produced;
- there should be a new shared strategy for maximising economic recovery of oil & gas for the UK ("MER UK"), with commitment from the government (Department of Energy & Climate Change and HM Treasury) and the industry;
- a new arm’s length regulatory body to oversee and develop this programme of change and growth should be created, which will also have the right, for the first time, to attend operator consortia management meetings;
- rapid implementation of the MER UK recommendations could deliver 3-4 billion barrels of oil equivalent (boe), more than would otherwise be recovered from the UK’s waters over the next 20 years, bringing over £200bn additional value to the UK economy.
- The second half of the review will focus on strategies to make the most of the economic opportunity offered by retrieving offshore oil & gas, accounting for feedback on the interim findings and further details on the evidence for a new arm’s length body.
For a link to the report click here