OGUK chief executive Deirdre Michie OBE has today appeared before the House of Commons Business Energy and Industrial Strategy (BEIS) Select Committee to give evidence on the Energy White Paper (EWP), published in December.

The recently published paper provides a critical opportunity for a transformational North Sea Transition Deal (NSTD) to deliver new business opportunities, jobs and skills at pace, and protect and transition the wider communities which currently rely on the oil and gas sector.

The powerful committee also had representatives from the Environmental Audit Committee (EAC) in attendance to quiz industry representatives on the content and deliverability of the much anticipated document.

OGUK Chief executive Deirdre Michie OBE said:

“We welcome the Publication of the Energy White Paper as it demonstrates a holistic approach to energy, which is something we have been asking for in terms of the development of a comprehensive energy strategy.

“It is a timely document which sets out ambitious and challenging expectations of the UK energy industry, including the offshore oil and gas sector.

“It seeks to build on the strengths of our sector and others in a meaningful way – by recognising the contribution the industry can make to a successful transition.

“We’re proud to tell our story. The sector is already in action and changing – building on its strong focus on oil and gas to incorporating wind, CCUS, hydrogen, wave and tidal energies, but there is a still a need for governmental support to help our workers and communities transition at pace.

“We must use this as an opportunity to solidify the importance of our workforce and produce reliable frameworks to support the transition of their knowledge and skills.

“We now need government and Parliament to develop strong legislation to help us deliver our net-zero ambitions whilst ensuring our energy communities are secure and equipped with the necessary infrastructure for a fair transition.”

 

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The UK offshore oil and gas industry has welcomed the deal outcome between the EU and the UK as the EU (Future Relationship) bill is voted on in parliament today. The leading representative body for the sector said that as the detail of the agreement is worked through, it is important that any friction and red tape is kept to a minimum whist ensuring it also reinforces the opportunity to pursue an exciting energy future.

OGUK chief executive Deirdre Michie OBE said:

“OGUK has consistently stated that a deal would be the best outcome for our industry. We therefore welcome the agreement and thank both the UK and EU for their efforts in securing this trade deal. We continue to work through the details with our members, the government, and the broader business community to ensure that every opportunity is taken to minimise and manage any potential disruption to goods and services in the energy sector, as well as limiting inefficiencies and red tape as changes are implemented.

“With anticipated agreement for the deal there is no time to waste, and it must also mark a renewed ambition in pursuit of an exciting energy future. We look forward to progressing the North Sea Transition Deal in the new year, which was supported in the government’s Energy White Paper and will unlock the full potential of our changing sector as a partner to deliver net zero.

“Through making the most of our domestic resources and putting our essential expertise to work, we can continue to provide jobs and opportunities in energy communities across the UK, while providing the affordable and lower carbon energy needed by millions across the country.”

 

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The leading representative body for the UK offshore oil and gas industry is appointing two directors to lead its newly created External Relations and Communications directorates aimed at supporting the current and evolving needs of OGUK’s members as the sector transitions towards a low carbon future.

Natalie Coupar takes up the role of Communications Director and Jenny Stanning will be OGUK’s External Relations Director, both with effect from 1 January 2021.

Natalie Coupar

Jenny Stanning

With extensive stakeholder and communications expertise, Natalie will lead the teams delivering the organisation’s media relations, editorial, design and digital strategy. Prior to her new role, Natalie was OGUK’s Communications Manager.

Before joining OGUK in 2017, Natalie developed broad and diverse communications experience in technology, the third sectors and politics.

As External Relations Director, Jenny will be responsible for leading OGUK’s external affairs, events and membership teams. In this new role her responsibilities include working with Governments, Parliaments, industry leaders, business and industry organisations and regulatory bodies to ensure that members’ interests are well represented.

Prior to joining OGUK, Jenny worked in politics and stakeholder management for 15 years including some time working in the Scottish Parliament.

In their new roles, Jenny and Natalie will build on the significant progress achieved by OGUK’s former Stakeholder and Communications Director Gareth Wynn, who leaves the representative body to take up a leadership role overseas, after three years as OGUK’s stakeholder and communications director.

OGUK Chief Executive Deirdre Michie commented:

“By any measure, this year has been incredibly challenging for all communities, yet the people in our industry have continued to demonstrate incredible resilience, applying their essential expertise to help support a fragile supply chain and its move towards a sustainable green recovery. Both Natalie and Jenny have great vision, commitment and drive and their experience will enable us to maintain this momentum, and help ensure we’re doing all we can to support our members.”

“I’m also grateful to Gareth for his invaluable contribution to OGUK and to the industry and wish him every success for the future.”

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The UK is set to lead the way in demonstrating how oil and gas producing countries can successfully and fairly transition towards a net zero future, OGUK Chief Executive Deirdre Michie OBE has said in a message to members today.

In an end of year message to over 400 member organisations based across  the UK, Deirdre Michie said the stage is now set for 2021 to bring about truly transformational change for the sector to support the country’s net zero ambitions.

Last week the sector’s regulator, the Oil and Gas Authority (OGA), published its revised strategy, which will look to support companies to reduce emissions and encourage progress on carbon capture and storage and hydrogen.

This revision comes shortly after the UK government published its Energy White Paper, the Scottish Government set out its Climate Change plan and the Committee on Climate Change published its advice to government on the sixth carbon budget.

OGUK also reinforced its concerns about the current challenges facing the sector and its supply chain as they continue to grapple with the coronavirus pandemic and ongoing volatility in commodity markets set against the backdrop of a potential no deal scenario at the end of the EU transition period at the end of the year.

OGUK Chief Executive Deirdre Michie OBE said:

Despite the significant challenges we have all faced operationally, economically and personally this year, we have much to proud of. We end the year with industry, government and regulator support for our sector as an enabler to a net zero future.

“In a year where our operations faced sustained challenges, we committed to a detailed emissions reduction pathway and maintained a laser focus on delivering the actions outlined Roadmap 2035. Our people and key workers worked throughout the pandemic to provide the affordable and secure energy and products needed by millions of households across the country.

“Yet, as we are all too aware, the impact of the pandemic and volatile commodity prices has come at a significant cost to many companies, with many jobs affected.

“The stage is now set for a truly transformational period for the people and companies working in our industry. 2021 will be another testing year for us all, including the energy communities and  jobs we need to continue to support. With alignment on our future and the urgent need to stimulate our sector’s recovery in support of this, it must therefore be a year in which we build on these positive developments and help translate strategy into action.

“A North Sea Transition Deal is a unique opportunity to show global leadership and demonstrate how an oil and gas producing country like the UK can successfully transition towards a low carbon future. OGUK is grateful to the many members who have supported the development of this deal  and look forward to progressing this with government early in 2021.

“While we know we don’t have all the answers, it is increasingly accepted that our essential expertise can support the development of hydrogen and carbon capture and storage. The inclusive approach between industry, governments, regulators and the communities we support will remain central to delivering a sustainable and socially accepted transition towards meeting our net zero ambitions.

“The development of a stable and supportive regulatory regime, which aligns with government ambitions is important and industry looks forward to working with the OGA to develop the underpinning guidance to its strategy proposals. We welcome recognition that the UK’s indigenous resources will be important as the country looks to reduce its reliance on imported energy and retain accountability for associated emissions.

“ So against the backdrop of a really tough year for so many, there are some positives that provide solid foundations to build upon, in terms of our contribution to the economy, jobs, energy communities and net zero ambitions. As we a look ahead to a year in which the UK will host the G7 presidency and COP26, it is this commitment to leadership and developing solutions, which will cement our position as a positive partner in the country’s energy future.”

The leading representative body for the UK oil and gas industry, OGUK, has appointed three major business leaders to its board as the sector sharpens its focus on the industry’s recovery and meeting net zero targets as it looks ahead to the new year.

Jose Luis Muñoz is CEO of Repsol Sinopec Resources UK Limited. José Luis joined Repsol in 2005 as part of the Strategy and Corporate Development team and was instrumental in the acquisition of the global operations of the former Talisman Energy business. He then went on to drive the post-merger integration of the ex-Talisman operations, ensuring a smooth transition.

Since 2017 and prior to his appointment as CEO, José Luis was Repsol representative within the Executive Committee of Repsol Sinopec Resources UK.

Andy Hessell has more than 30 years’ experience in the UK energy industry specialising in commercial, strategy and business development roles in the UK and overseas.  Over the past five years, as Managing Director, Andy has been successfully growing Kellas Midstream, an innovative independent company that owns and manages critical North Sea infrastructure.

Prior to joining Kellas, Andy enjoyed a 26-year career with BP in a variety of leadership positions including North Sea region Chief Financial Officer and Vice President Commercial Operations, North Sea & Angola.

Also joining the board is Mikki Corcoran, Managing Director of Schlumberger Europe. Prior to this role she worked in North America Offshore as General Manager Drilling, and before that, as Global Account Director for Schlumberger.

During her 20-year career in the Oil & Gas industry with Schlumberger, Mikki has held a variety of management positions, including HR, Operations, Sales & Commercial, and Supply Chain, in Norway, United States, Asia and Europe.

Deirdre Michie, OGUK’s chief executive, commented:

“The diverse experience and knowledge that José, Mikki and Andy bring to the OGUK Board will be a great asset as our industry continues to tackle a challenging landscape of low commodity prices and the coronavirus pandemic, while at the same time seeking to support the UK’s cleaner climate ambitions as we look to 2021 and the challenges and opportunities it will bring.

“This diversity of perspectives from across industry is critical as we work to deliver Roadmap 2035, finding solutions for low carbon oil and gas production while doing everything we can to revive our world-class but fragile supply chain and protect the skills of our people for the future.“

 

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The leading UK oil and gas industry body OGUK has today welcomed the Scottish Government’s Hydrogen Policy Statement, which recognises that the critical role the country’s oil and gas industry has to play in realising a hydrogen economy.

Commenting, OGUK Sustainability Director Mike Tholen said:

“The Scottish Government’s Hydrogen Policy Statement released today recognises the critical role our industry has to play in creating a hydrogen industry, both through the expertise of our supply chain and the talents of our workforce, and in the opportunities presented by repurposing of our infrastructure.

“Investing in these new energy resources will be key to unlocking the challenge of achieving net-zero emissions across the economy. Many businesses within our industry are already actively involved in the development of such hydrogen projects, recognised by the Committee on Climate Change as an essential part of the energy mix in years to come.

“While it’s encouraging to see investments like this, today’s Hydrogen Policy Statement reiterates the importance of securing a sector deal for our industry. We will continue to work at pace with the Scottish government to ensure that our supply chain is supported throughout the transition, securing jobs and the energy supply, whilst supporting our energy communities.”

 

ENDS

The leading representative body for the UK offshore oil and gas industry has today (Wednesday 14 December) responded to the Scottish Government’s updated Climate Change Plan, which recognises the value the oil and gas industry can make in stepping up the transition to net-zero.

Commenting on the updated Climate Change Plan, OGUK Chief Executive Deirdre Michie OBE said:

“The Scottish Governments’ Climate Change Plan recognises the critical role of the country’s changing oil and gas industry in accelerating moves towards a low carbon future.

“Through bringing to life hydrogen and carbon capture, and through harnessing the expertise and skills of our talented people, we can continue to provide lower carbon and affordable energy to millions of people while helping unlock the energy system of the future.

“We keenly await the Scottish Government’s revised Energy Strategy in 2021. However, given the significance of our industry to Scottish jobs and the economy, as well as the triple threat of COVID-19 we’ve faced this year, we must continue to work at pace with the Scottish government to ensure that our supply chain is supported throughout the Just Transition.

“We’re committed to delivering our net-zero goals through reducing our own emissions, as detailed in Roadmap 2035, while many companies are already actively supporting the new CCUS and hydrogen projects recognised by the Committee on Climate Change as essential. We will continue to work with both governments to secure a vital North Sea Transition deal in the first half of 2021, safeguarding jobs and supporting our energy communities in the journey to net-zero.”

 

ENDS

The leading representative body for the UK offshore oil and gas industry has today (Monday 14 December) responded to the UK Government’s Energy White Paper, in which the government reaffirms the value of the sector both now and in the future, and the need for the North Sea Transition Deal.

Commenting on the paper, OGUK Chief Executive Deirdre Michie OBE said:

“We welcome the publication of the Secretary of State for Business, Energy and Industrial Strategy’s Energy White Paper, in which the government recognises the positive contribution our industry can make in the transition to net-zero, both now and in the future. It sets out ambitious and challenging expectations of the UK offshore oil and gas industry, and we are committed to continue working collaboratively with governments and regulators as we deliver these.

“Today’s report not only highlights the critical role our industry plays in maintaining energy security in the UK, but also commits again to a transformational North Sea Transition Deal, which will be a key lever to moving the sector at pace towards a low-carbon future.

“It’s encouraging to see that today’s report also recognises the value of the UK oil and gas industry workforce, especially after such a challenging year. We know that if we are to unlock the challenge of net-zero, the talent, expertise and skills found within our workforce will be vital.

“As an industry, we remain committed to delivering our net-zero goals, as detailed in our Roadmap 2035. We will continue to work with the Government at pace to secure this vital sector deal in the first half of 2021, safeguarding jobs and supporting our energy communities in the journey to net-zero.”

 

The leading representative body for the UK offshore oil and gas industry has today (Saturday 12 December) commented on the Prime Minister’s announcement that the UK will end direct government support for the oil and gas projects overseas.

Commenting on the announcement,  OGUK’s chief executive Deirdre Michie said:

“The UK is taking a global leading role in how to tackle emissions at home, and we recognise we should do the same abroad. Our industry and its world class supply chain built on the back of pioneering work done over decades in the North Sea, have a key role to play in delivering the Prime Minister’s ten-point plan.

“We are also in advanced discussion with the government on a North Sea Transition Deal that can provide a model for how an industry can transform in a fair way which creates jobs, boosts the economy, and delivers on the essential policy goal of net zero emissions. In the coming years, with support from the Government, our homegrown energy supply chain has the potential to benefit hugely from exporting the expertise it is developing in carbon capture, in hydrogen and in decarbonising operations.

“We need to be careful to maintain our supply chain’s competitiveness that has built up over decades of North Sea experience, through a period of rapid change. If we are successful, the UK’s domestic leadership can reach around the world, with our industry at the heart of it. However, given the current fragility of our supply chain, this all needs to move quickly if we are to protect and sustain it as world class.”

 

The winners of OGUK’s Awards 2020 were honoured in virtual style this evening as industry came together to watch the ceremony digitally for the first time ever.

The night was the highlight of industry’s cultural calendar, with hundreds attending the event through YouTube, LinkedIn and Facebook live and the prestigious first-time Audience Award receiving over 19,000 votes.

A total of 27 finalists, from more than 90 entrants, contended for the ten awards presented at the event.

Renowned industry expert John Hogg, HSSEQ Director TAQA Bratani Ltd, received Mentor of the Year for the vital role he has played and his extraordinary commitment to aiding learning and improvement across the industry.

Meanwhile Connor Robb, Project Manager at Baker Hughes, took the Graduate of the Year trophy for making his mark in the UK oil and gas industry, delivering tangible benefits to his employer, and being identified as a future leader by peers.

OGUK’s own health, safety and environment director Trevor Stapleton was also recognised for his outstanding teamwork this year in supporting the industry through the efforts of the Pandemic Steering Group, helping to deal with the challenges brought on by COVID-19 and protecting our people while maintaining safe operations.

The coveted first-time Audience Award was awarded to Omniscient Safety Innovations for their standout performance after receiving over 3,000 votes.

Commenting after the event, OGUK’s chief executive Deirdre Michie said:

“Congratulations to all our winners and finalists for their phenomenal achievements. It was an amazing event, with the offshore oil and gas industry coming together to celebrate its best and brightest in what has been one of the strongest headwinds our sector has ever had to face.

“Although we could not be together in person, it is so important to highlight the progress our supply chain and businesses have made, and the continuous hard work of the people throughout our industry.

“The celebration is a super way to acknowledge great people, achievements and delivery, despite the current challenges we face.

“Looking to 2021, I believe the North Sea grit the people in our industry are known for will continue to help us move forward, with courage, co-operation and commitment.

“Thank you to everyone who participated, and to our members for their great support and the OGUK team for once again raising the bar to deliver such an excellent event that the whole industry can be proud of.”

 

Individual award winners:

  • Apprentice of the Year (sponsored by OPITO) – Scott Milligan, Trainee Mechanical Technician, CNOOC International
  • Graduate of the Year (sponsored by ECITB) – Connor Robb, Project Manager, Baker Hughes
  • Mentor of the Year – John Hogg, HSSEQ Director, TAQA Bratani Ltd

Company award winners:                           

  • Workforce Engagement (sponsored by Wood) – Spirit Energy
  • Business Innovation SME – Omniscient Safety Innovations Ltd
  • Business Innovation Large Enterprise – Petrofac
  • Diversity & Inclusion (sponsored by Apache) – Baker Hughes
  • Energy Transition (sponsored by Fairfield Decom Limited) – TOTAL E&P UK Ltd
  • Excellence in Decommissioning – Fairfield Energy Ltd

 

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A major independent report which sets out detailed routes for meeting the country’s climate targets has recognised the positive contribution the UK’s changing oil and gas industry can make in the energy transition.

The Sixth Carbon Budget published by the Committee on Climate Change today (Wednesday 9 December) outlines an ambitious and challenging programme of change for all industries to meet a range of scenarios.  It recommends a future energy system which utilises renewables, hydrogen, carbon capture and storage. Oil and gas demand is expected to fall by up to 85 percent and 70 percent respectively by 2050 depending on the selected scenario.

The committee makes the case for meeting as much as possible of the UK’s ongoing domestic needs from domestic production, warning of the risk that lower production costs internationally could favour imports.

The report confirms the important role of the UK’s oil and gas supply chain and the opportunity that exists from the £50bn investment required annually through to 2050 to achieve the country’s climate goals. The sector has thousands of companies across the UK that are set to play a critical role. The UK oil and gas industry supply chain currently has an annual turnover of over £26bn and the majority of companies are already also active in renewables or other parts of the energy industry.

The leading representative body for the sector, OGUK, today said the report underlines the need to deliver a homegrown transition towards net zero. It comes as the Committee on Climate Change underlined the importance of policy to ensure a fair transition, noting the Government’s planned North Sea Transition Deal can enable workers in the sector to transition to the hydrogen sector and other energy sectors.

The report recognises the role the changing sector can play during the transition and beyond, recommending:

  • The development of a ‘blue hydrogen bridge’ where the reformation of gas with carbon capture and storage is used in the short to medium term to establish a mass market for hydrogen, providing around 60 percent of hydrogen supply by 2035 and with its share of this growing market falling to 32 percent in 2050 as green hydrogen capacity builds up. Hydrogen will support shipping, heavy goods vehicles, industry and some building heating
  • The development of Carbon Capture and Storage at scale, with the emissions pathways for Scotland, Wales and Northern Ireland highly dependent on carbon storage capabilities. Carbon capture and storage to be applied at scale to the manufacturing and construction sector in the 2030s and continues to remove CO2 at similar levels out to 2050
  • The report calls for action to reduce emissions from the remaining fossil fuel supply (the main source of Fuel Supply emissions) by 75% by 2035 from 2018 levels. Mitigation actions include fuel switching, CCS and technologies to reduce methane flaring, venting and leakage. This is in line with industry’s existing commitments to halve emissions in the next decade before reaching 90 percent by 2040.
  • Reducing imports of oil and gas and directing spend instead to the UK economy, however the report warns lower production costs internationally may favour imports over domestic production. The CCC makes clear its proposed budget is designed to be met by reducing UK sources of emissions and not displacing them to other markets. Increased oil and gas imports that displace domestic production would not be consistent with this principle.
  • Low carbon investment must scale up to £50 billion each year to deliver Net Zero, supporting the UK’s economic recovery over the next decade. This is a significant opportunity for the UK’s oil and gas supply chain to realise new opportunities, support jobs and grow exports.

Commenting, OGUK Chief Executive Deirdre Michie said:

“The destination has always been clear, and the UK’s changing oil and gas industry is stepping up to help us get there. As the big choices facing our economy and society come into sharper focus, the UK has an opportunity to lead the way and we are committed to being a positive partner on this journey.

“We recognise that the industry we see today will be different to the one we see in the future. Many oil and gas companies are already adapting and transforming and with our supply chain is actively pursuing the new energy opportunities highlighted.

“As we look to bring these big changes to life, securing targeted support for our domestic supply chain remains critical if it is to attract a healthy share of the £50 billion investment the Committee on Climate Change says will be required annually by 2050.

“As the report notes, how we respond to these challenges at home can have a positive impact globally, and our sector continues to blaze a trail having published a clear pathway towards a net zero industry last year and committed to challenging emissions reductions targets earlier this year.

“This reinforces the need for a homegrown transition which puts the essential expertise of supply chain companies to work, protects jobs, while creating new ones of the future, while maintaining the supply of secure, affordable and low carbon energy produced in the UK to meet demand both now and in future.

“This vision for the future forms the basis of OGUK’s Roadmap 2035, our blueprint for net zero published last year, and its delivery can be accelerated through a North Sea Transition Deal.

“It shows the important contribution our industry can make as the country looks to carve out new industrial opportunities which can be exported globally, while at the same time meeting as much of the UK’s oil and gas demand with homegrown resources produced with ever decreasing emissions.”

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The leading UK oil and gas industry body OGUK has today reinforced the significance of securing a sector deal, in light of new emission targets announced by the Prime Minister today.

The government’s plan commits to reducing the UK’s carbon emissions by at least 68% by 2030, based on 1990 levels. These ambitious new targets will see the UK commit to reducing emissions at a rate faster than any major economy.

Whilst OGUK remains committed to addressing the issue of climate change, as outlined in their Roadmap 2035, today’s announcement only underlined the scale of the challenge ahead and the critical need for securing a North Sea Transition Deal.

OGUK Chief Executive Deirdre Michie OBE said: 

“The Prime Minister’s ambitious emissions announcement today reinforces the significance of securing a transformational sector deal for our changing sector.

“The UK offshore oil and gas industry has a vital role to play in supporting the UK to achieve the targets set out today. Through continuing to reduce our own carbon emissions, and by tapping into the expertise within our supply chain to develop solutions, we can help meet the country’s climate goals through developing critical solutions including carbon capture and storage and hydrogen at scale.

“This will help to unlock the full potential of this industry, including its world-class supply chain to deliver a green recovery which delivers our climate goals, supports jobs and enables our energy communities to adapt and thrive.

“We continue to work collaboratively with the UK Government on proposals for the North Sea Transition deal, creating a clear pathway to becoming a net-zero basin, whilst protecting domestic energy supplies, jobs and communities in a low carbon economy.”

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Industry body OGUK is urging the oil and gas workforce to rally behind its first ever survey on diversity and inclusion (D&I) with just three weeks to go until submissions close.

With a growing focus being placed on the integration of the energy industry, attracting and retaining a diverse range of talent, as well as ensuring inclusive and collaborative ways of working, greater D&I is vital for success. The responses provided by survey participants will play a crucial role in the industry’s drive towards a more diverse and inclusive working culture, which will be key in supporting the UK’s transition to a net zero economy.

The survey has received a large volume of responses since its launch, which will provide valuable insight and help promote D&I in the oil and gas workforce. The survey will remain open for a further three weeks before closing on Thursday, 31 December. The results and insights from the survey are expected to be released in Q1 2021.

The survey is accessible to individuals currently working in the global oil and gas industry, as well as those who may have recently retired, are currently not working or between jobs, but are able to share their experiences from previous roles.

Craig Shanaghey, President, Operations Services (Europe & Africa) at Wood, and D&I Task Group Chair, said:

“Dialling up the dialogue on diversity and inclusion is going to be key in our efforts to drive greater awareness, action, and improvement. It’s critical that we capture the diverse voice of the industry in this survey in order that the focused actions driven by the report deliver the meaningful impact and change that’s needed to underpin industry’s delivery of Roadmap 2035.”

Director of the RGU Energy Transition Institute, Prof. Paul de Leeuw, who is managing the UKCS diversity and inclusion survey, said:

“The oil and gas industry is facing significant change at the moment on the back of COVID-19, the energy transition, technology developments and rapidly changing industry dynamics. To ensure the industry is set up for success, we will need to unlock all of the talent in our sector, as well as be able to attract new skills and capabilities.

“So far we have received great support for the survey from across the industry. I would really encourage everyone to compete the survey and help us build a better and more inclusive industry.”

The anonymised and confidential survey has been developed by OGUK’s Diversity and Inclusion Task Group in collaboration with Robert Gordon University (RGU). The survey can be accessed here or via OGUK’s social channels.

 

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The leading representative body for the UK offshore oil and gas industry has today (Thursday 3 December) responded to a report published by the Institute for Public Policy Research (IPPR). The Net Zero North Sea report has urged the offshore oil and gas industry to set out a plan for phasing out production and migrating to greener energies.

Commenting on the report, OGUK’s chief executive Deirdre Michie said:

“This report shows that more and more people are becoming invested in ensuring the successful transition of our sector not only for our climate, but for our people and communities too. As the report notes, industry now requires a long-term plan to build bridges into new sectors for our businesses and supply chain. The North Sea Transition Deal will be a key catalyst for this, helping to bring to life our detailed Roadmap 2035 which outlines the positive contribution we can make to the UK’s energy future.

“The UK’s changing offshore oil and gas industry has the essential expertise to develop critical net zero solutions, including CCUS and hydrogen. At the same time, our ambitious emissions reduction targets mean we can meet the existing but declining need for oil and gas with resources produced in the UK and with fewer emissions.

“This venture will need a stable and supportive regulatory regime, which aligns with governments’ new green ambitions, whilst recognising that the skills, technical resources and financial capabilities of our industry and supply chain will be needed to complete an inclusive and managed transition.”

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A flagship report published today by the leading representative body for the UK offshore oil and gas industry finds that the UK’s carbon emissions fell by an estimated 10.3 percent this year, as the economy contracted by 11.3 percent.

OGUK today said the figures confirm the scale of the challenge in securing a green recovery, urging governments to act now to ensure the UK builds a homegrown transition towards a clean energy future.

It comes as the report finds 85 percent of OGUK members throughout the supply chain expect to increase their diversification into non-oil and gas activities during the next 12-24 months due to the current market conditions. Underlining the critical capabilities within the sector to accelerate government ambitions to reach net zero carbon emissions by 2050 in the UK and 2045 in Scotland.

OGUK’s Economic Report 2020 explores the shifting economic and energy environment in this, a year of rapid change. From the impact of COVID-19 and the commercial consequences of the pandemic, to the downturn in global energy demand, this report explores the industry’s crucial but evolving future role in the energy mix.

Despite the challenges the industry faces, the report also reinforces the sector’s long-term commitments to the energy transition, with the final part of the report setting out how OGUK have further developed Roadmap 2035 into their vision for the North Sea Transition Deal.

The report shows that:

  • Global energy demand is expected to decrease by 5 percent in 2020, the UK reported 12 percent reduction in total energy demand in the first three quarters of the year
  • UK carbon emissions have fallen by an estimated 10.3 percent so far this year, while global emissions have fallen by 5.5 percent
  • At the start of 2020, there were more than £35 billion of capital investment opportunities identified within company plans over the next 10 years. Progression of these opportunities is important in the ability to continue to meet the UK’s oil and gas demand in the future.

In a world where sustainability is a priority, today’s report highlights that with a clear and supported pathway for the changing industry the UK can build a homegrown transition towards a lower-carbon future.

OGUK’s Chief Executive Deirdre Michie said:

“Today’s report highlights that we have a unique opportunity for the transition towards a lower-carbon future to be homegrown in this country and potentially exported across the world.

“2020 has been an incredibly challenging year for the oil and gas supply chain as it faced both the well-documented impact of COVID-19 and the subsequent decline in demand for energy.

“Utilising the expert technical knowledge that exists within the substantial UK oil and gas supply chain is fundamental if we are to evolve toward a lower-carbon future.

“Our Economic Report 2020 shows that oil and gas produced in the UK will continue to support energy security in the decades to come, but as part of a changing and cleaner energy mix. With the right support this industry can truly come of age and continue to make a positive contribution in this new energy landscape. However, our report makes clear that reaching this positive future will require working in the here and now to protect the jobs and companies needed to bring our climate ambitions to life.

“OGUK continue to work closely with the UK Government on proposals for a transformational North Sea Transition Deal, which will help unlock the full contribution the industry can make to achieving net-zero and the wider economic benefits.”

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OGUK has said a survey of oil and gas companies which finds about a fifth of firms are expecting more redundancies in 2021 is further confirmation of the stark conditions faced by many.

The leading representative body for the sector, which is due to publish its flagship Economic Report early next week, said it continues to champion a North Sea Transition Deal.

Commenting on the 32nd AGCC Oil and Gas Survey published today, OGUK Chief Executive Deirdre Michie said:

“The AGCC Oil and Gas Survey is further confirmation of the stark conditions faced by many companies in our industry, and we remain particularly concerned about the health of our world class supply chain. OGUK continues to work with industry to see what we can to together to safely increase activity and protect jobs while at the same time championing a North Sea Transition Deal with governments which could help realise the full potential of our changing sector, both now and in moves to a lower carbon future.”

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As the oil and gas sector continues to deal with the effects of COVID-19 and the collapse of commodity prices, OGUK’s 2020 Decommissioning Insight report reveals the decommissioning industry though resilient has not escaped the impact of such unprecedented conditions.

Given the major disruptions and challenges of 2020, OGUK conducted an additional interim survey of operators in June 2020 to provide deeper insight of the impact of COVID-19 on decommissioning activity. This showed that continuing market uncertainty has led to around £500 million of decommissioning expenditure previously scheduled for 2020-22 being deferred into the future.

OGUK’s supply chain and operations director, Katy Heidenreich said:

“All parts of the oil and gas business are experiencing reductions in cash flow and decommissioning is no different. We’ve seen a 30 per cent reduction in expenditure from £1.47 billion in early 2020, to around £1.08 billion but despite these pressures, the sector is in no rush to decommission.

While many projects have been able to continue, we are also expecting to see reduced activity across all areas of decommissioning over the next three years.

During 2020, our hard-pressed supply chain has demonstrated both resilience in delivering the roster of projects that have gone ahead this year, but also continual performance improvement in terms of cost and efficiency.

We remain focused on supporting our supply chain through, for example, ensuring visibility of work so that when conditions change, our industry remains competitive. The specialist skills now being developed will also help us make the most of the opportunities presented by the energy transition which include low emission decommissioning, supporting the circular economy, re-purposing facilities and contributing to CCS, hydrogen and offshore wind developments.”

The report can be found here and the  findings show:

  • Estimated total spend on decommissioning in 2020 is £1.1 bn still consistently around 10% of overall industry expenditure
  • Decommissioning of a record two northern North Sea platforms in one year
  • Forecast for 2020 shrank by 30% from £1.47 bn to £1.08 bn
  • 116 wells, 260km of pipelines and 15 topsides have been decommissioned in 2020
  • Well decommissioning activity at lowest level since 2016

OGUK’s annual Decommissioning Insight also provides an analysis for the wider North Sea market including Norway, the Netherlands and Denmark and the scope of this year’s report has broadened to reflect the industry’s efforts to accelerate the energy transition and embrace opportunities to support a low-carbon future.

 

Ends

Commenting on the 10-point green industrial revolution announced by Prime Minister Boris Johnson, OGUK’s chief executive, Deirdre Michie said today:

“We are pleased to see the Government is committed to its ambitious plans for tackling emissions in spite of all the other challenges we face. Our industry is already in action, evolving and contributing. We were one of the first major sectors in the UK to embrace the Government’s target to achieve net zero emissions by 2050.

The good news for jobs and the economy is that with the right support, companies based here in the UK have the expertise to make us world leaders in tackling emissions, including through carbon capture and hydrogen production, both of which are key to the clean energy system of the future. Exciting new technologies and innovations need to sit alongside delivering real reductions in emissions and improved efficiency. Things that our industry and every one of us can be getting on with right now.”

Ends

The contribution decommissioning can make to the low carbon future is a key theme at OGUK’s first ever virtual conference on November 24-25 when Professor Paul de Leeuw director of the RGU Energy Transition Institute chairs a session exploring the skills and job opportunities this shift in focus presents.

Joe Leask, OGUK’s decommissioning manager, said:

“Tackling climate change is a global priority and our industry has the essential expertise to help make a difference. This session will examine the rapidly changing energy landscape and how we can meet our decommissioning obligations in an even more sustainable way. We know our skills and supply chain will play a big role in developing the low carbon solutions we need to meet climate change targets.”

The free, interactive event is open to all, with organisers hoping it will harness the power of different perspectives, challenge established norms and drive new conversations about decommissioning in the broader energy world.

Professor Paul de Leeuw commented: Decommissioning better and greener will have a key role to play in the transition to a lower carbon future. To do this effectively, we will need sector leading skills, capabilities and technologies. Combined with future decommissioning requirements in the renewables, hydrogen and CCUS sectors, the industry has a unique opportunity to create a new, world class energy decommissioning workforce. This session will be a great opportunity to bring together industry leaders, experts and decommissioning professionals to discuss these challenges and to provide new, stimulating insights on how we can collectively set this up for success.”

Decommissioning in a low carbon future also features in a session chaired by Louise O’Hara Murray OGUK’s Emissions Improvement manager. This will share learnings across the oil and gas and renewables sector, and the opportunities posed by energy integration, carbon capture and storage and innovation in low emissions decommissioning.

Throughout the two-day event, which has already attracted more than 550 registrations, participants can access a fully immersive experience enabling them to interact with industry experts, visit virtual exhibition stands and engage in online networking. With sponsorship from Repsol Sinopec Resource UK and IOGP, the conference covers an extensive range of topics including the UK’s ambition to become a Global Hub of Excellence, evolving developments in regulation and initiatives aimed at delivering added value across the decommissioning process.

More information is available on the Offshore Decommissioning Conference website at

https://offshoredecommissioningconference.co.uk/

 

ENDS

The leading representative body for the UK offshore oil and gas industry, OGUK, has today (Wednesday, November 11) warned that it could take up to three years to restart many of the projects lost due to the impact of the coronavirus pandemic and commodity price downturn.

The warning comes in its Autumn Snapshot published today, which provides a business outlook for the third quarter of 2020.

The report finds that low sentiment in the outlook of companies continues into 2021, reflecting high levels of uncertainty in the market and reinforcing challenges brought on by Covid-19 are likely to persist.

However, despite the operational difficulties being faced, the industry continues to safely deliver secure and affordable energy, with production levels having remained relatively strong throughout the year.

OGUK’s report reinforces that a North Sea transition deal for this sector is essential in meeting the need for secure, affordable energy to be produced with fewer emissions and to position the UK as a leader in developing low-carbon solutions.

Commenting on the report, OGUK’s market intelligence manager Ross Dornan said:

“New projects and investments are crucial to providing secure energy, sustaining supply chain capabilities, and ensuring the UK is viewed as a good place for these companies to anchor their resources.

“As our Autumn Snapshot shows, it is estimated that companies could continue to take a conservative approach in 2021, reflecting the ongoing challenges of the coronavirus pandemic and the wider economic downturn.

“Securing a North Sea transition deal for this changing industry is critical in ensuring the sector can use its essential skills to help build back better, providing many of the net-zero carbon emissions solutions required for the future.

“At the same time, OGUK’s Recovery Group continues to help shape the sector’s recovery as it takes steps to support the energy transition.

“The current fragile position of many areas of the supply chain means that this future contribution cannot be taken for granted. Industry needs this support now if it is going to be able to deliver later.”

Other indicators show UK gas demand fell by 16 per cent in Q2 compared with the same period in 2019, and drilling activity levels are on their way to becoming the lowest since the early 1970s.

Increasing activity, investment levels, and progress made by OGUK’s recovery group will be vital in providing new opportunities for the supply chain as the industry navigates the transition to a low-carbon future.

 

Key findings:

  • Brent crude averaged just under $41/bbl across the first 10 months of 2020. This is $23/bbl less than the 2019 average and prices at the end of October were at a four-month low ($37/bbl). Market expectations are than price will take time to recover.
  • The average day ahead NBP gas prices in the first 10 months of 2020 was 21.61 pence/therm (p/th), 38 per cent lower than the average for the same period in 2019
  • UK gas demand fell by 16 per cent in Q2 compared with the same period in 2019
  • OGUK members indicate low sentiment levels
  • Companies outline little change in their current outlook for 2021
  • Production has remained relatively strong, however shows a slight reduction of 2.5 per cent so far this year and is around 3 per cent lower than the 2019 full year daily average. This could be expected to recover in Q4 closer to in line with 2019 levels.
  • Fifty-four wells were spudded in the first 10 months of 2020, meaning the year is now almost certain to see the lowest total levels of drilling activity since the early 1970s
  • Only six exploration wells have been spudded so far and it is possible that there will be no further exploration drilling this year
  • Estimated that investors could continue to take a conservative approach in 2021, reflecting the ongoing challenges
  • Increasing activity and investment levels will be vital in providing new opportunities for the supply chain
  • OGUK anticipates that it could take 2-3 years to re-phase and recover the capital activity lost from 2020

Ends

The full report can be found here.

OGUK CEO says Energy White Paper must be opportunity for jobs and communities

OGUK chief executive Deirdre Michie OBE has today appeared before the House of Commons Business Energy and Industrial Strategy (BEIS) Select Committee to give evidence on the Energy White Paper (EWP), published in December.

The recently published paper provides a critical opportunity for a transformational North Sea Transition Deal (NSTD) to deliver new business opportunities, jobs and skills at pace, and protect and transition the wider communities which currently rely on the oil and gas sector.

The powerful committee also had representatives from the Environmental Audit Committee (EAC) in attendance to quiz industry representatives on the content and deliverability of the much anticipated document.

OGUK Chief executive Deirdre Michie OBE said:

“We welcome the Publication of the Energy White Paper as it demonstrates a holistic approach to energy, which is something we have been asking for in terms of the development of a comprehensive energy strategy.

“It is a timely document which sets out ambitious and challenging expectations of the UK energy industry, including the offshore oil and gas sector.

“It seeks to build on the strengths of our sector and others in a meaningful way – by recognising the contribution the industry can make to a successful transition.

“We’re proud to tell our story. The sector is already in action and changing – building on its strong focus on oil and gas to incorporating wind, CCUS, hydrogen, wave and tidal energies, but there is a still a need for governmental support to help our workers and communities transition at pace.

“We must use this as an opportunity to solidify the importance of our workforce and produce reliable frameworks to support the transition of their knowledge and skills.

“We now need government and Parliament to develop strong legislation to help us deliver our net-zero ambitions whilst ensuring our energy communities are secure and equipped with the necessary infrastructure for a fair transition.”

 

Ends

OGUK responds to Brexit deal outcome as EU Future Relationship bill voted through

The UK offshore oil and gas industry has welcomed the deal outcome between the EU and the UK as the EU (Future Relationship) bill is voted on in parliament today. The leading representative body for the sector said that as the detail of the agreement is worked through, it is important that any friction and red tape is kept to a minimum whist ensuring it also reinforces the opportunity to pursue an exciting energy future.

OGUK chief executive Deirdre Michie OBE said:

“OGUK has consistently stated that a deal would be the best outcome for our industry. We therefore welcome the agreement and thank both the UK and EU for their efforts in securing this trade deal. We continue to work through the details with our members, the government, and the broader business community to ensure that every opportunity is taken to minimise and manage any potential disruption to goods and services in the energy sector, as well as limiting inefficiencies and red tape as changes are implemented.

“With anticipated agreement for the deal there is no time to waste, and it must also mark a renewed ambition in pursuit of an exciting energy future. We look forward to progressing the North Sea Transition Deal in the new year, which was supported in the government’s Energy White Paper and will unlock the full potential of our changing sector as a partner to deliver net zero.

“Through making the most of our domestic resources and putting our essential expertise to work, we can continue to provide jobs and opportunities in energy communities across the UK, while providing the affordable and lower carbon energy needed by millions across the country.”

 

Ends

OGUK appoints two directors to drive forward stakeholder and communications agenda

The leading representative body for the UK offshore oil and gas industry is appointing two directors to lead its newly created External Relations and Communications directorates aimed at supporting the current and evolving needs of OGUK’s members as the sector transitions towards a low carbon future.

Natalie Coupar takes up the role of Communications Director and Jenny Stanning will be OGUK’s External Relations Director, both with effect from 1 January 2021.

Natalie Coupar

Jenny Stanning

With extensive stakeholder and communications expertise, Natalie will lead the teams delivering the organisation’s media relations, editorial, design and digital strategy. Prior to her new role, Natalie was OGUK’s Communications Manager.

Before joining OGUK in 2017, Natalie developed broad and diverse communications experience in technology, the third sectors and politics.

As External Relations Director, Jenny will be responsible for leading OGUK’s external affairs, events and membership teams. In this new role her responsibilities include working with Governments, Parliaments, industry leaders, business and industry organisations and regulatory bodies to ensure that members’ interests are well represented.

Prior to joining OGUK, Jenny worked in politics and stakeholder management for 15 years including some time working in the Scottish Parliament.

In their new roles, Jenny and Natalie will build on the significant progress achieved by OGUK’s former Stakeholder and Communications Director Gareth Wynn, who leaves the representative body to take up a leadership role overseas, after three years as OGUK’s stakeholder and communications director.

OGUK Chief Executive Deirdre Michie commented:

“By any measure, this year has been incredibly challenging for all communities, yet the people in our industry have continued to demonstrate incredible resilience, applying their essential expertise to help support a fragile supply chain and its move towards a sustainable green recovery. Both Natalie and Jenny have great vision, commitment and drive and their experience will enable us to maintain this momentum, and help ensure we’re doing all we can to support our members.”

“I’m also grateful to Gareth for his invaluable contribution to OGUK and to the industry and wish him every success for the future.”

Ends

Revised regulator strategy confirms alignment on industry future

The UK is set to lead the way in demonstrating how oil and gas producing countries can successfully and fairly transition towards a net zero future, OGUK Chief Executive Deirdre Michie OBE has said in a message to members today.

In an end of year message to over 400 member organisations based across  the UK, Deirdre Michie said the stage is now set for 2021 to bring about truly transformational change for the sector to support the country’s net zero ambitions.

Last week the sector’s regulator, the Oil and Gas Authority (OGA), published its revised strategy, which will look to support companies to reduce emissions and encourage progress on carbon capture and storage and hydrogen.

This revision comes shortly after the UK government published its Energy White Paper, the Scottish Government set out its Climate Change plan and the Committee on Climate Change published its advice to government on the sixth carbon budget.

OGUK also reinforced its concerns about the current challenges facing the sector and its supply chain as they continue to grapple with the coronavirus pandemic and ongoing volatility in commodity markets set against the backdrop of a potential no deal scenario at the end of the EU transition period at the end of the year.

OGUK Chief Executive Deirdre Michie OBE said:

Despite the significant challenges we have all faced operationally, economically and personally this year, we have much to proud of. We end the year with industry, government and regulator support for our sector as an enabler to a net zero future.

“In a year where our operations faced sustained challenges, we committed to a detailed emissions reduction pathway and maintained a laser focus on delivering the actions outlined Roadmap 2035. Our people and key workers worked throughout the pandemic to provide the affordable and secure energy and products needed by millions of households across the country.

“Yet, as we are all too aware, the impact of the pandemic and volatile commodity prices has come at a significant cost to many companies, with many jobs affected.

“The stage is now set for a truly transformational period for the people and companies working in our industry. 2021 will be another testing year for us all, including the energy communities and  jobs we need to continue to support. With alignment on our future and the urgent need to stimulate our sector’s recovery in support of this, it must therefore be a year in which we build on these positive developments and help translate strategy into action.

“A North Sea Transition Deal is a unique opportunity to show global leadership and demonstrate how an oil and gas producing country like the UK can successfully transition towards a low carbon future. OGUK is grateful to the many members who have supported the development of this deal  and look forward to progressing this with government early in 2021.

“While we know we don’t have all the answers, it is increasingly accepted that our essential expertise can support the development of hydrogen and carbon capture and storage. The inclusive approach between industry, governments, regulators and the communities we support will remain central to delivering a sustainable and socially accepted transition towards meeting our net zero ambitions.

“The development of a stable and supportive regulatory regime, which aligns with government ambitions is important and industry looks forward to working with the OGA to develop the underpinning guidance to its strategy proposals. We welcome recognition that the UK’s indigenous resources will be important as the country looks to reduce its reliance on imported energy and retain accountability for associated emissions.

“ So against the backdrop of a really tough year for so many, there are some positives that provide solid foundations to build upon, in terms of our contribution to the economy, jobs, energy communities and net zero ambitions. As we a look ahead to a year in which the UK will host the G7 presidency and COP26, it is this commitment to leadership and developing solutions, which will cement our position as a positive partner in the country’s energy future.”

Trio of board appointments as OGUK looks ahead to 2021 ambitions

The leading representative body for the UK oil and gas industry, OGUK, has appointed three major business leaders to its board as the sector sharpens its focus on the industry’s recovery and meeting net zero targets as it looks ahead to the new year.

Jose Luis Muñoz is CEO of Repsol Sinopec Resources UK Limited. José Luis joined Repsol in 2005 as part of the Strategy and Corporate Development team and was instrumental in the acquisition of the global operations of the former Talisman Energy business. He then went on to drive the post-merger integration of the ex-Talisman operations, ensuring a smooth transition.

Since 2017 and prior to his appointment as CEO, José Luis was Repsol representative within the Executive Committee of Repsol Sinopec Resources UK.

Andy Hessell has more than 30 years’ experience in the UK energy industry specialising in commercial, strategy and business development roles in the UK and overseas.  Over the past five years, as Managing Director, Andy has been successfully growing Kellas Midstream, an innovative independent company that owns and manages critical North Sea infrastructure.

Prior to joining Kellas, Andy enjoyed a 26-year career with BP in a variety of leadership positions including North Sea region Chief Financial Officer and Vice President Commercial Operations, North Sea & Angola.

Also joining the board is Mikki Corcoran, Managing Director of Schlumberger Europe. Prior to this role she worked in North America Offshore as General Manager Drilling, and before that, as Global Account Director for Schlumberger.

During her 20-year career in the Oil & Gas industry with Schlumberger, Mikki has held a variety of management positions, including HR, Operations, Sales & Commercial, and Supply Chain, in Norway, United States, Asia and Europe.

Deirdre Michie, OGUK’s chief executive, commented:

“The diverse experience and knowledge that José, Mikki and Andy bring to the OGUK Board will be a great asset as our industry continues to tackle a challenging landscape of low commodity prices and the coronavirus pandemic, while at the same time seeking to support the UK’s cleaner climate ambitions as we look to 2021 and the challenges and opportunities it will bring.

“This diversity of perspectives from across industry is critical as we work to deliver Roadmap 2035, finding solutions for low carbon oil and gas production while doing everything we can to revive our world-class but fragile supply chain and protect the skills of our people for the future.“

 

Ends

Scottish Government’s Hydrogen Policy Statement emphasises need for sector deal, OGUK says

The leading UK oil and gas industry body OGUK has today welcomed the Scottish Government’s Hydrogen Policy Statement, which recognises that the critical role the country’s oil and gas industry has to play in realising a hydrogen economy.

Commenting, OGUK Sustainability Director Mike Tholen said:

“The Scottish Government’s Hydrogen Policy Statement released today recognises the critical role our industry has to play in creating a hydrogen industry, both through the expertise of our supply chain and the talents of our workforce, and in the opportunities presented by repurposing of our infrastructure.

“Investing in these new energy resources will be key to unlocking the challenge of achieving net-zero emissions across the economy. Many businesses within our industry are already actively involved in the development of such hydrogen projects, recognised by the Committee on Climate Change as an essential part of the energy mix in years to come.

“While it’s encouraging to see investments like this, today’s Hydrogen Policy Statement reiterates the importance of securing a sector deal for our industry. We will continue to work at pace with the Scottish government to ensure that our supply chain is supported throughout the transition, securing jobs and the energy supply, whilst supporting our energy communities.”

 

ENDS

Support for the supply chain vital throughout Just Transition says OGUK

The leading representative body for the UK offshore oil and gas industry has today (Wednesday 14 December) responded to the Scottish Government’s updated Climate Change Plan, which recognises the value the oil and gas industry can make in stepping up the transition to net-zero.

Commenting on the updated Climate Change Plan, OGUK Chief Executive Deirdre Michie OBE said:

“The Scottish Governments’ Climate Change Plan recognises the critical role of the country’s changing oil and gas industry in accelerating moves towards a low carbon future.

“Through bringing to life hydrogen and carbon capture, and through harnessing the expertise and skills of our talented people, we can continue to provide lower carbon and affordable energy to millions of people while helping unlock the energy system of the future.

“We keenly await the Scottish Government’s revised Energy Strategy in 2021. However, given the significance of our industry to Scottish jobs and the economy, as well as the triple threat of COVID-19 we’ve faced this year, we must continue to work at pace with the Scottish government to ensure that our supply chain is supported throughout the Just Transition.

“We’re committed to delivering our net-zero goals through reducing our own emissions, as detailed in Roadmap 2035, while many companies are already actively supporting the new CCUS and hydrogen projects recognised by the Committee on Climate Change as essential. We will continue to work with both governments to secure a vital North Sea Transition deal in the first half of 2021, safeguarding jobs and supporting our energy communities in the journey to net-zero.”

 

ENDS

OGUK response to the Government’s Energy White Paper

The leading representative body for the UK offshore oil and gas industry has today (Monday 14 December) responded to the UK Government’s Energy White Paper, in which the government reaffirms the value of the sector both now and in the future, and the need for the North Sea Transition Deal.

Commenting on the paper, OGUK Chief Executive Deirdre Michie OBE said:

“We welcome the publication of the Secretary of State for Business, Energy and Industrial Strategy’s Energy White Paper, in which the government recognises the positive contribution our industry can make in the transition to net-zero, both now and in the future. It sets out ambitious and challenging expectations of the UK offshore oil and gas industry, and we are committed to continue working collaboratively with governments and regulators as we deliver these.

“Today’s report not only highlights the critical role our industry plays in maintaining energy security in the UK, but also commits again to a transformational North Sea Transition Deal, which will be a key lever to moving the sector at pace towards a low-carbon future.

“It’s encouraging to see that today’s report also recognises the value of the UK oil and gas industry workforce, especially after such a challenging year. We know that if we are to unlock the challenge of net-zero, the talent, expertise and skills found within our workforce will be vital.

“As an industry, we remain committed to delivering our net-zero goals, as detailed in our Roadmap 2035. We will continue to work with the Government at pace to secure this vital sector deal in the first half of 2021, safeguarding jobs and supporting our energy communities in the journey to net-zero.”

 

OGUK response to UK Government plans to end funding for overseas oil and gas projects

The leading representative body for the UK offshore oil and gas industry has today (Saturday 12 December) commented on the Prime Minister’s announcement that the UK will end direct government support for the oil and gas projects overseas.

Commenting on the announcement,  OGUK’s chief executive Deirdre Michie said:

“The UK is taking a global leading role in how to tackle emissions at home, and we recognise we should do the same abroad. Our industry and its world class supply chain built on the back of pioneering work done over decades in the North Sea, have a key role to play in delivering the Prime Minister’s ten-point plan.

“We are also in advanced discussion with the government on a North Sea Transition Deal that can provide a model for how an industry can transform in a fair way which creates jobs, boosts the economy, and delivers on the essential policy goal of net zero emissions. In the coming years, with support from the Government, our homegrown energy supply chain has the potential to benefit hugely from exporting the expertise it is developing in carbon capture, in hydrogen and in decarbonising operations.

“We need to be careful to maintain our supply chain’s competitiveness that has built up over decades of North Sea experience, through a period of rapid change. If we are successful, the UK’s domestic leadership can reach around the world, with our industry at the heart of it. However, given the current fragility of our supply chain, this all needs to move quickly if we are to protect and sustain it as world class.”

 

Industry unites to celebrate best and brightest amid challenging year

The winners of OGUK’s Awards 2020 were honoured in virtual style this evening as industry came together to watch the ceremony digitally for the first time ever.

The night was the highlight of industry’s cultural calendar, with hundreds attending the event through YouTube, LinkedIn and Facebook live and the prestigious first-time Audience Award receiving over 19,000 votes.

A total of 27 finalists, from more than 90 entrants, contended for the ten awards presented at the event.

Renowned industry expert John Hogg, HSSEQ Director TAQA Bratani Ltd, received Mentor of the Year for the vital role he has played and his extraordinary commitment to aiding learning and improvement across the industry.

Meanwhile Connor Robb, Project Manager at Baker Hughes, took the Graduate of the Year trophy for making his mark in the UK oil and gas industry, delivering tangible benefits to his employer, and being identified as a future leader by peers.

OGUK’s own health, safety and environment director Trevor Stapleton was also recognised for his outstanding teamwork this year in supporting the industry through the efforts of the Pandemic Steering Group, helping to deal with the challenges brought on by COVID-19 and protecting our people while maintaining safe operations.

The coveted first-time Audience Award was awarded to Omniscient Safety Innovations for their standout performance after receiving over 3,000 votes.

Commenting after the event, OGUK’s chief executive Deirdre Michie said:

“Congratulations to all our winners and finalists for their phenomenal achievements. It was an amazing event, with the offshore oil and gas industry coming together to celebrate its best and brightest in what has been one of the strongest headwinds our sector has ever had to face.

“Although we could not be together in person, it is so important to highlight the progress our supply chain and businesses have made, and the continuous hard work of the people throughout our industry.

“The celebration is a super way to acknowledge great people, achievements and delivery, despite the current challenges we face.

“Looking to 2021, I believe the North Sea grit the people in our industry are known for will continue to help us move forward, with courage, co-operation and commitment.

“Thank you to everyone who participated, and to our members for their great support and the OGUK team for once again raising the bar to deliver such an excellent event that the whole industry can be proud of.”

 

Individual award winners:

  • Apprentice of the Year (sponsored by OPITO) – Scott Milligan, Trainee Mechanical Technician, CNOOC International
  • Graduate of the Year (sponsored by ECITB) – Connor Robb, Project Manager, Baker Hughes
  • Mentor of the Year – John Hogg, HSSEQ Director, TAQA Bratani Ltd

Company award winners:                           

  • Workforce Engagement (sponsored by Wood) – Spirit Energy
  • Business Innovation SME – Omniscient Safety Innovations Ltd
  • Business Innovation Large Enterprise – Petrofac
  • Diversity & Inclusion (sponsored by Apache) – Baker Hughes
  • Energy Transition (sponsored by Fairfield Decom Limited) – TOTAL E&P UK Ltd
  • Excellence in Decommissioning – Fairfield Energy Ltd

 

Ends

Climate report reinforces need for homegrown transition

 

A major independent report which sets out detailed routes for meeting the country’s climate targets has recognised the positive contribution the UK’s changing oil and gas industry can make in the energy transition.

The Sixth Carbon Budget published by the Committee on Climate Change today (Wednesday 9 December) outlines an ambitious and challenging programme of change for all industries to meet a range of scenarios.  It recommends a future energy system which utilises renewables, hydrogen, carbon capture and storage. Oil and gas demand is expected to fall by up to 85 percent and 70 percent respectively by 2050 depending on the selected scenario.

The committee makes the case for meeting as much as possible of the UK’s ongoing domestic needs from domestic production, warning of the risk that lower production costs internationally could favour imports.

The report confirms the important role of the UK’s oil and gas supply chain and the opportunity that exists from the £50bn investment required annually through to 2050 to achieve the country’s climate goals. The sector has thousands of companies across the UK that are set to play a critical role. The UK oil and gas industry supply chain currently has an annual turnover of over £26bn and the majority of companies are already also active in renewables or other parts of the energy industry.

The leading representative body for the sector, OGUK, today said the report underlines the need to deliver a homegrown transition towards net zero. It comes as the Committee on Climate Change underlined the importance of policy to ensure a fair transition, noting the Government’s planned North Sea Transition Deal can enable workers in the sector to transition to the hydrogen sector and other energy sectors.

The report recognises the role the changing sector can play during the transition and beyond, recommending:

  • The development of a ‘blue hydrogen bridge’ where the reformation of gas with carbon capture and storage is used in the short to medium term to establish a mass market for hydrogen, providing around 60 percent of hydrogen supply by 2035 and with its share of this growing market falling to 32 percent in 2050 as green hydrogen capacity builds up. Hydrogen will support shipping, heavy goods vehicles, industry and some building heating
  • The development of Carbon Capture and Storage at scale, with the emissions pathways for Scotland, Wales and Northern Ireland highly dependent on carbon storage capabilities. Carbon capture and storage to be applied at scale to the manufacturing and construction sector in the 2030s and continues to remove CO2 at similar levels out to 2050
  • The report calls for action to reduce emissions from the remaining fossil fuel supply (the main source of Fuel Supply emissions) by 75% by 2035 from 2018 levels. Mitigation actions include fuel switching, CCS and technologies to reduce methane flaring, venting and leakage. This is in line with industry’s existing commitments to halve emissions in the next decade before reaching 90 percent by 2040.
  • Reducing imports of oil and gas and directing spend instead to the UK economy, however the report warns lower production costs internationally may favour imports over domestic production. The CCC makes clear its proposed budget is designed to be met by reducing UK sources of emissions and not displacing them to other markets. Increased oil and gas imports that displace domestic production would not be consistent with this principle.
  • Low carbon investment must scale up to £50 billion each year to deliver Net Zero, supporting the UK’s economic recovery over the next decade. This is a significant opportunity for the UK’s oil and gas supply chain to realise new opportunities, support jobs and grow exports.

Commenting, OGUK Chief Executive Deirdre Michie said:

“The destination has always been clear, and the UK’s changing oil and gas industry is stepping up to help us get there. As the big choices facing our economy and society come into sharper focus, the UK has an opportunity to lead the way and we are committed to being a positive partner on this journey.

“We recognise that the industry we see today will be different to the one we see in the future. Many oil and gas companies are already adapting and transforming and with our supply chain is actively pursuing the new energy opportunities highlighted.

“As we look to bring these big changes to life, securing targeted support for our domestic supply chain remains critical if it is to attract a healthy share of the £50 billion investment the Committee on Climate Change says will be required annually by 2050.

“As the report notes, how we respond to these challenges at home can have a positive impact globally, and our sector continues to blaze a trail having published a clear pathway towards a net zero industry last year and committed to challenging emissions reductions targets earlier this year.

“This reinforces the need for a homegrown transition which puts the essential expertise of supply chain companies to work, protects jobs, while creating new ones of the future, while maintaining the supply of secure, affordable and low carbon energy produced in the UK to meet demand both now and in future.

“This vision for the future forms the basis of OGUK’s Roadmap 2035, our blueprint for net zero published last year, and its delivery can be accelerated through a North Sea Transition Deal.

“It shows the important contribution our industry can make as the country looks to carve out new industrial opportunities which can be exported globally, while at the same time meeting as much of the UK’s oil and gas demand with homegrown resources produced with ever decreasing emissions.”

Ends

Prime Minister’s emissions targets reinforce the need for sector deal

The leading UK oil and gas industry body OGUK has today reinforced the significance of securing a sector deal, in light of new emission targets announced by the Prime Minister today.

The government’s plan commits to reducing the UK’s carbon emissions by at least 68% by 2030, based on 1990 levels. These ambitious new targets will see the UK commit to reducing emissions at a rate faster than any major economy.

Whilst OGUK remains committed to addressing the issue of climate change, as outlined in their Roadmap 2035, today’s announcement only underlined the scale of the challenge ahead and the critical need for securing a North Sea Transition Deal.

OGUK Chief Executive Deirdre Michie OBE said: 

“The Prime Minister’s ambitious emissions announcement today reinforces the significance of securing a transformational sector deal for our changing sector.

“The UK offshore oil and gas industry has a vital role to play in supporting the UK to achieve the targets set out today. Through continuing to reduce our own carbon emissions, and by tapping into the expertise within our supply chain to develop solutions, we can help meet the country’s climate goals through developing critical solutions including carbon capture and storage and hydrogen at scale.

“This will help to unlock the full potential of this industry, including its world-class supply chain to deliver a green recovery which delivers our climate goals, supports jobs and enables our energy communities to adapt and thrive.

“We continue to work collaboratively with the UK Government on proposals for the North Sea Transition deal, creating a clear pathway to becoming a net-zero basin, whilst protecting domestic energy supplies, jobs and communities in a low carbon economy.”

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Last call for the industry workforce to voice opinion on D&I in the sector 

Industry body OGUK is urging the oil and gas workforce to rally behind its first ever survey on diversity and inclusion (D&I) with just three weeks to go until submissions close.

With a growing focus being placed on the integration of the energy industry, attracting and retaining a diverse range of talent, as well as ensuring inclusive and collaborative ways of working, greater D&I is vital for success. The responses provided by survey participants will play a crucial role in the industry’s drive towards a more diverse and inclusive working culture, which will be key in supporting the UK’s transition to a net zero economy.

The survey has received a large volume of responses since its launch, which will provide valuable insight and help promote D&I in the oil and gas workforce. The survey will remain open for a further three weeks before closing on Thursday, 31 December. The results and insights from the survey are expected to be released in Q1 2021.

The survey is accessible to individuals currently working in the global oil and gas industry, as well as those who may have recently retired, are currently not working or between jobs, but are able to share their experiences from previous roles.

Craig Shanaghey, President, Operations Services (Europe & Africa) at Wood, and D&I Task Group Chair, said:

“Dialling up the dialogue on diversity and inclusion is going to be key in our efforts to drive greater awareness, action, and improvement. It’s critical that we capture the diverse voice of the industry in this survey in order that the focused actions driven by the report deliver the meaningful impact and change that’s needed to underpin industry’s delivery of Roadmap 2035.”

Director of the RGU Energy Transition Institute, Prof. Paul de Leeuw, who is managing the UKCS diversity and inclusion survey, said:

“The oil and gas industry is facing significant change at the moment on the back of COVID-19, the energy transition, technology developments and rapidly changing industry dynamics. To ensure the industry is set up for success, we will need to unlock all of the talent in our sector, as well as be able to attract new skills and capabilities.

“So far we have received great support for the survey from across the industry. I would really encourage everyone to compete the survey and help us build a better and more inclusive industry.”

The anonymised and confidential survey has been developed by OGUK’s Diversity and Inclusion Task Group in collaboration with Robert Gordon University (RGU). The survey can be accessed here or via OGUK’s social channels.

 

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OGUK responds to IPPR’s Net Zero North Sea report

The leading representative body for the UK offshore oil and gas industry has today (Thursday 3 December) responded to a report published by the Institute for Public Policy Research (IPPR). The Net Zero North Sea report has urged the offshore oil and gas industry to set out a plan for phasing out production and migrating to greener energies.

Commenting on the report, OGUK’s chief executive Deirdre Michie said:

“This report shows that more and more people are becoming invested in ensuring the successful transition of our sector not only for our climate, but for our people and communities too. As the report notes, industry now requires a long-term plan to build bridges into new sectors for our businesses and supply chain. The North Sea Transition Deal will be a key catalyst for this, helping to bring to life our detailed Roadmap 2035 which outlines the positive contribution we can make to the UK’s energy future.

“The UK’s changing offshore oil and gas industry has the essential expertise to develop critical net zero solutions, including CCUS and hydrogen. At the same time, our ambitious emissions reduction targets mean we can meet the existing but declining need for oil and gas with resources produced in the UK and with fewer emissions.

“This venture will need a stable and supportive regulatory regime, which aligns with governments’ new green ambitions, whilst recognising that the skills, technical resources and financial capabilities of our industry and supply chain will be needed to complete an inclusive and managed transition.”

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The UK can build a homegrown transition towards clean energy future, OGUK’s Economic Report shows

A flagship report published today by the leading representative body for the UK offshore oil and gas industry finds that the UK’s carbon emissions fell by an estimated 10.3 percent this year, as the economy contracted by 11.3 percent.

OGUK today said the figures confirm the scale of the challenge in securing a green recovery, urging governments to act now to ensure the UK builds a homegrown transition towards a clean energy future.

It comes as the report finds 85 percent of OGUK members throughout the supply chain expect to increase their diversification into non-oil and gas activities during the next 12-24 months due to the current market conditions. Underlining the critical capabilities within the sector to accelerate government ambitions to reach net zero carbon emissions by 2050 in the UK and 2045 in Scotland.

OGUK’s Economic Report 2020 explores the shifting economic and energy environment in this, a year of rapid change. From the impact of COVID-19 and the commercial consequences of the pandemic, to the downturn in global energy demand, this report explores the industry’s crucial but evolving future role in the energy mix.

Despite the challenges the industry faces, the report also reinforces the sector’s long-term commitments to the energy transition, with the final part of the report setting out how OGUK have further developed Roadmap 2035 into their vision for the North Sea Transition Deal.

The report shows that:

  • Global energy demand is expected to decrease by 5 percent in 2020, the UK reported 12 percent reduction in total energy demand in the first three quarters of the year
  • UK carbon emissions have fallen by an estimated 10.3 percent so far this year, while global emissions have fallen by 5.5 percent
  • At the start of 2020, there were more than £35 billion of capital investment opportunities identified within company plans over the next 10 years. Progression of these opportunities is important in the ability to continue to meet the UK’s oil and gas demand in the future.

In a world where sustainability is a priority, today’s report highlights that with a clear and supported pathway for the changing industry the UK can build a homegrown transition towards a lower-carbon future.

OGUK’s Chief Executive Deirdre Michie said:

“Today’s report highlights that we have a unique opportunity for the transition towards a lower-carbon future to be homegrown in this country and potentially exported across the world.

“2020 has been an incredibly challenging year for the oil and gas supply chain as it faced both the well-documented impact of COVID-19 and the subsequent decline in demand for energy.

“Utilising the expert technical knowledge that exists within the substantial UK oil and gas supply chain is fundamental if we are to evolve toward a lower-carbon future.

“Our Economic Report 2020 shows that oil and gas produced in the UK will continue to support energy security in the decades to come, but as part of a changing and cleaner energy mix. With the right support this industry can truly come of age and continue to make a positive contribution in this new energy landscape. However, our report makes clear that reaching this positive future will require working in the here and now to protect the jobs and companies needed to bring our climate ambitions to life.

“OGUK continue to work closely with the UK Government on proposals for a transformational North Sea Transition Deal, which will help unlock the full contribution the industry can make to achieving net-zero and the wider economic benefits.”

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Survey is further confirmation of stark conditions faced by industry

OGUK has said a survey of oil and gas companies which finds about a fifth of firms are expecting more redundancies in 2021 is further confirmation of the stark conditions faced by many.

The leading representative body for the sector, which is due to publish its flagship Economic Report early next week, said it continues to champion a North Sea Transition Deal.

Commenting on the 32nd AGCC Oil and Gas Survey published today, OGUK Chief Executive Deirdre Michie said:

“The AGCC Oil and Gas Survey is further confirmation of the stark conditions faced by many companies in our industry, and we remain particularly concerned about the health of our world class supply chain. OGUK continues to work with industry to see what we can to together to safely increase activity and protect jobs while at the same time championing a North Sea Transition Deal with governments which could help realise the full potential of our changing sector, both now and in moves to a lower carbon future.”

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Report confirms no rush to decommission as sector withstands disruptive year

 

As the oil and gas sector continues to deal with the effects of COVID-19 and the collapse of commodity prices, OGUK’s 2020 Decommissioning Insight report reveals the decommissioning industry though resilient has not escaped the impact of such unprecedented conditions.

Given the major disruptions and challenges of 2020, OGUK conducted an additional interim survey of operators in June 2020 to provide deeper insight of the impact of COVID-19 on decommissioning activity. This showed that continuing market uncertainty has led to around £500 million of decommissioning expenditure previously scheduled for 2020-22 being deferred into the future.

OGUK’s supply chain and operations director, Katy Heidenreich said:

“All parts of the oil and gas business are experiencing reductions in cash flow and decommissioning is no different. We’ve seen a 30 per cent reduction in expenditure from £1.47 billion in early 2020, to around £1.08 billion but despite these pressures, the sector is in no rush to decommission.

While many projects have been able to continue, we are also expecting to see reduced activity across all areas of decommissioning over the next three years.

During 2020, our hard-pressed supply chain has demonstrated both resilience in delivering the roster of projects that have gone ahead this year, but also continual performance improvement in terms of cost and efficiency.

We remain focused on supporting our supply chain through, for example, ensuring visibility of work so that when conditions change, our industry remains competitive. The specialist skills now being developed will also help us make the most of the opportunities presented by the energy transition which include low emission decommissioning, supporting the circular economy, re-purposing facilities and contributing to CCS, hydrogen and offshore wind developments.”

The report can be found here and the  findings show:

  • Estimated total spend on decommissioning in 2020 is £1.1 bn still consistently around 10% of overall industry expenditure
  • Decommissioning of a record two northern North Sea platforms in one year
  • Forecast for 2020 shrank by 30% from £1.47 bn to £1.08 bn
  • 116 wells, 260km of pipelines and 15 topsides have been decommissioned in 2020
  • Well decommissioning activity at lowest level since 2016

OGUK’s annual Decommissioning Insight also provides an analysis for the wider North Sea market including Norway, the Netherlands and Denmark and the scope of this year’s report has broadened to reflect the industry’s efforts to accelerate the energy transition and embrace opportunities to support a low-carbon future.

 

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OGUK response: Prime Minister’s 10-point plan for green industrial revolution

Commenting on the 10-point green industrial revolution announced by Prime Minister Boris Johnson, OGUK’s chief executive, Deirdre Michie said today:

“We are pleased to see the Government is committed to its ambitious plans for tackling emissions in spite of all the other challenges we face. Our industry is already in action, evolving and contributing. We were one of the first major sectors in the UK to embrace the Government’s target to achieve net zero emissions by 2050.

The good news for jobs and the economy is that with the right support, companies based here in the UK have the expertise to make us world leaders in tackling emissions, including through carbon capture and hydrogen production, both of which are key to the clean energy system of the future. Exciting new technologies and innovations need to sit alongside delivering real reductions in emissions and improved efficiency. Things that our industry and every one of us can be getting on with right now.”

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Conference explores decommissioning in a low carbon future

The contribution decommissioning can make to the low carbon future is a key theme at OGUK’s first ever virtual conference on November 24-25 when Professor Paul de Leeuw director of the RGU Energy Transition Institute chairs a session exploring the skills and job opportunities this shift in focus presents.

Joe Leask, OGUK’s decommissioning manager, said:

“Tackling climate change is a global priority and our industry has the essential expertise to help make a difference. This session will examine the rapidly changing energy landscape and how we can meet our decommissioning obligations in an even more sustainable way. We know our skills and supply chain will play a big role in developing the low carbon solutions we need to meet climate change targets.”

The free, interactive event is open to all, with organisers hoping it will harness the power of different perspectives, challenge established norms and drive new conversations about decommissioning in the broader energy world.

Professor Paul de Leeuw commented: Decommissioning better and greener will have a key role to play in the transition to a lower carbon future. To do this effectively, we will need sector leading skills, capabilities and technologies. Combined with future decommissioning requirements in the renewables, hydrogen and CCUS sectors, the industry has a unique opportunity to create a new, world class energy decommissioning workforce. This session will be a great opportunity to bring together industry leaders, experts and decommissioning professionals to discuss these challenges and to provide new, stimulating insights on how we can collectively set this up for success.”

Decommissioning in a low carbon future also features in a session chaired by Louise O’Hara Murray OGUK’s Emissions Improvement manager. This will share learnings across the oil and gas and renewables sector, and the opportunities posed by energy integration, carbon capture and storage and innovation in low emissions decommissioning.

Throughout the two-day event, which has already attracted more than 550 registrations, participants can access a fully immersive experience enabling them to interact with industry experts, visit virtual exhibition stands and engage in online networking. With sponsorship from Repsol Sinopec Resource UK and IOGP, the conference covers an extensive range of topics including the UK’s ambition to become a Global Hub of Excellence, evolving developments in regulation and initiatives aimed at delivering added value across the decommissioning process.

More information is available on the Offshore Decommissioning Conference website at

https://offshoredecommissioningconference.co.uk/

 

ENDS

Transition deal critical for sector as report warns recovery could take years

The leading representative body for the UK offshore oil and gas industry, OGUK, has today (Wednesday, November 11) warned that it could take up to three years to restart many of the projects lost due to the impact of the coronavirus pandemic and commodity price downturn.

The warning comes in its Autumn Snapshot published today, which provides a business outlook for the third quarter of 2020.

The report finds that low sentiment in the outlook of companies continues into 2021, reflecting high levels of uncertainty in the market and reinforcing challenges brought on by Covid-19 are likely to persist.

However, despite the operational difficulties being faced, the industry continues to safely deliver secure and affordable energy, with production levels having remained relatively strong throughout the year.

OGUK’s report reinforces that a North Sea transition deal for this sector is essential in meeting the need for secure, affordable energy to be produced with fewer emissions and to position the UK as a leader in developing low-carbon solutions.

Commenting on the report, OGUK’s market intelligence manager Ross Dornan said:

“New projects and investments are crucial to providing secure energy, sustaining supply chain capabilities, and ensuring the UK is viewed as a good place for these companies to anchor their resources.

“As our Autumn Snapshot shows, it is estimated that companies could continue to take a conservative approach in 2021, reflecting the ongoing challenges of the coronavirus pandemic and the wider economic downturn.

“Securing a North Sea transition deal for this changing industry is critical in ensuring the sector can use its essential skills to help build back better, providing many of the net-zero carbon emissions solutions required for the future.

“At the same time, OGUK’s Recovery Group continues to help shape the sector’s recovery as it takes steps to support the energy transition.

“The current fragile position of many areas of the supply chain means that this future contribution cannot be taken for granted. Industry needs this support now if it is going to be able to deliver later.”

Other indicators show UK gas demand fell by 16 per cent in Q2 compared with the same period in 2019, and drilling activity levels are on their way to becoming the lowest since the early 1970s.

Increasing activity, investment levels, and progress made by OGUK’s recovery group will be vital in providing new opportunities for the supply chain as the industry navigates the transition to a low-carbon future.

 

Key findings:

  • Brent crude averaged just under $41/bbl across the first 10 months of 2020. This is $23/bbl less than the 2019 average and prices at the end of October were at a four-month low ($37/bbl). Market expectations are than price will take time to recover.
  • The average day ahead NBP gas prices in the first 10 months of 2020 was 21.61 pence/therm (p/th), 38 per cent lower than the average for the same period in 2019
  • UK gas demand fell by 16 per cent in Q2 compared with the same period in 2019
  • OGUK members indicate low sentiment levels
  • Companies outline little change in their current outlook for 2021
  • Production has remained relatively strong, however shows a slight reduction of 2.5 per cent so far this year and is around 3 per cent lower than the 2019 full year daily average. This could be expected to recover in Q4 closer to in line with 2019 levels.
  • Fifty-four wells were spudded in the first 10 months of 2020, meaning the year is now almost certain to see the lowest total levels of drilling activity since the early 1970s
  • Only six exploration wells have been spudded so far and it is possible that there will be no further exploration drilling this year
  • Estimated that investors could continue to take a conservative approach in 2021, reflecting the ongoing challenges
  • Increasing activity and investment levels will be vital in providing new opportunities for the supply chain
  • OGUK anticipates that it could take 2-3 years to re-phase and recover the capital activity lost from 2020

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The full report can be found here.