The Prime Minister has announced a number of new measures to help recover an additional 3-4 billion barrels of ‘increasingly hard-to-reach’ North Sea oil and gas.
The measures were recommended by Sir Ian Wood’s review into maximizing North Sea revenue, which was commissioned by Ed Davey, the UK’s secretary of state for energy and climate change.
Commenting on the potential of North Sea oil and gas, Cameron said: “For many years the UK has supported the North Sea oil and gas industry and we have worked together to make this an economic success the whole country can be proud of. I promise we will continue to use the UK’s broad shoulders to invest in this vital industry so we can attract businesses, create jobs, develop new skills in our young people and ensure we can compete in the global race.”
Measures announced today include a move away from production licences for individual blocks to licences awarded on the basis of recovering the maximum amount of petroleum and a new independent regulator to supervise licensing. The government has also pledged to work closer to the industry by sharing infrastructure, geophysical information and cutting red tape.
The government is billing the new measures as “good for the economy and good for jobs”, arguing that the oil and gas industry already employs 450,000 people across the UK. It also notes that tax revenues from oil and gas last year were 40% less than the year before – a loss of £4.7 billion.
Ed Davey concluded: “Britain will still need large amounts of oil and gas, even as we cut our carbon emissions over the coming decades.”