Offshore Energies UK, the leading trade body for the sector, says today’s award of new oil and gas licences by the North Sea Transition Authority (NSTA) will strengthen homegrown energy security as the sector continues its expansion in wind, hydrogen and carbon capture and storage.
A total of 27 licences have been offered in quicker-to-production areas with more to follow subject to additional environmental checks.
Oil and gas production supports 200,000 jobs in the UK today. A recent report from Robert Gordon University found the wider offshore energy workforce could increase further if the UK delivers a managed transition that avoids a rapid decline in the domestic production of oil and gas before offshore wind and other projects are delivered at the scale required to deliver a net zero economy by 2050.
Licensing is the first step taken by energy production companies with the regulator to find and produce homegrown supplies, managing the nation’s reliance on imports and safeguarding its world-class energy workforce. Over the last decade, the average time between exploration and production in UK waters has been four years and eight months.
Today, 75% of the UK’s energy needs are provided by oil and gas. The UK is a net importer of oil and gas, meaning it consumes more than it produces domestically.
There are currently 284 active oil and gas fields in the North Sea and by 2030 around 180 of those will have ceased production due to natural decline. The industry needs the churn of new licences to ensure no cliff edge in domestic production. OEUK has warned that without fresh investment the UK will be reliant on oil and gas imports for 80% of its needs by 2030.
Offshore Energies UK Chief Executive David Whitehouse comments:
“This announcement is a boost for UK energy security and for the 200,000 people in jobs supported by the offshore energy sector. These are the very people we need to deliver reliable supplies of homegrown energy produced in the UK, for the UK.
“We all recognise that our energy system must change, and our industry includes companies that are expanding into renewables while using their expertise to pioneer ever cleaner energy production. The reality of the energy transition is that we need both oil and gas and renewables in an integrated system to protect the UK’s energy needs over the coming years.
“Last year filling the fuel import gap cost the UK £117bn. That’s a lot of money spent supporting the economic growth of other producing countries. With careful management and collaboration, the UK can become the gold standard of energy transitions. We can drive economic growth, reach our climate goals and avoid a future where we increasingly import our energy and export our jobs.
“Energy security is national security. We need pragmatic policy and political consensus if we are to realise £200billon potential company investment in UK wind, hydrogen and carbon capture, and oil and gas production over this decade, with all the jobs and work for our supply chains this will bring.”
Today’s announcement comes over a year after the 33rd Licensing round was opened in October 2022, with applications closing at the end of January 2023.
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