RE: November trading update1 Nov 2023 13:56
Autumn Statement 2023 will be 22 November, hopefully something positive in there for UK O&G industry/Energy Security.
Global uncertainty strengthens case for UK oil and gas, says industry boss
Emerging geopolitical challenges are strengthening the case for domestic oil and gas production, argued the boss of the country’s offshore energy trade association.
David Whitehouse, chief executive of Offshore Energies UK (OEUK), emphasized that domestic fossil fuel production was vital for energy security in increasingly unpredictable international markets.
“When you see things like the war in Ukraine, and unrest now in the Middle East, I think more and more it makes you recognise that it is in a country’s interests to be producing their own energy,” he said.
Hamas’s attack on Israel, followed by Israel’s military operations in Gaza has raised the prospect of conflict escalating in the region – which is home to some of the world’s largest oil producers including Saudi Arabia and Iran.
This could potentially put pressure on supplies and trigger further sanctions, exposing markets to fresh volatility with oil and gas prices soaring this month.
Whitehouse called on the government to adopt a “very pragmatic” approach to “take care” of energy security in such difficult circumstances.
He said: “I think that is absolutely highlighted by global events.”
His comments follow the latest report from the National Infrastructure Commission which has backed government plans to decarbonise the electricity grid by 2035, and to reduce the UK’s reliance on fossil fuels – urging the effective scrapping of the country’s gas network.
It predicted the UK will be exposed to volatile wholesale costs, which rose to record highs last year following Russia’s invasion of Ukraine, as long as the country was dependent on oil and gas to meet its consumption needs – meaning households will be on the hook for higher energy bills.
This is in line with warnings from the International Energy Agency that the climate goals of developed economies such as the net zero target for 2050 and the commitments of the Paris Agreement will not be met if new fossil fuel projects are sanctioned.
Currently, 80 per cent of the UK’s energy needs are still met by oil and gas, with the government estimating fossil fuels will make up to 25 per cent of the supply mix in 2050 – although this calculation is not recognised by the Climate Change Committee.
However, Whitehouse feared increased dependence on potentially unreliable partners during the transition to renewables and low carbon sources, with major oil producers such as Russia and Iran both under Western sanctions.
“Fundamentally, the more you develop your own homegrown energy, the more secure you are,” he said.
OEUK pushes for stability in oil and gas tax regime
OEUK represents over 400 companies operating in the North Sea including not just oil and gas producers b
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