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Realising fresh opportunities in tough times

The oil and gas industry is rising to the challenge of meeting the UK’s energy needs while producing fewer emissions. The SNS is central to plans where skills and expertise nurtured for more than a half a century will be applied to offshore wind, carbon capture and storage, and hydrogen – boosting the UK economy by decarbonisation. Mike Tholen, Oil and Gas UK sustainability director, looks ahead.
Mike Tholen portrait cropped
Mike Tholen, Oil and Gas UK sustainability director. Picture: Oil and Gas UK

The UK’s offshore oil and gas industry is changing. From the East of England to the West of Shetland frontier region, talented people with fresh ambition are transforming for the better how we produce the energy used by millions across the UK to power homes, cars and businesses, using technologies unimagined a generation ago.

Oil and gas continue to provide for most of our energy needs, accounting for three-quarters of the UK’s primary energy. After 50 years, gas produced from the Southern North Sea still represents nearly a third of all gas production in UK waters.

But our industry rarely stands still, and even in the face of challenging headwinds from the coronavirus pandemic and low commodity prices, traditional oil and gas companies are innovating and positioning themselves for a much lower carbon future.

As we continue to look to an uncertain future, one thing is clear – the energy transition is here to stay, and we are embracing it with gusto.

This is the positive story OGUK is proud to tell when we make the case for our industry to be put front and centre of the UK’s ambitions to build back better through a green recovery.

So, what is our story? Put simply, our industry has the essential expertise to help the UK meet its climate ambitions by 2050 and power the green recovery. At the same time, we can help keep costs low for households and families, retain jobs and create new roles for the future.

Our ability to realise this future rests on five key strands: meeting UK energy needs; growing the economy and exports; developing people and skills; supporting net zero; and driving technology and innovation.

Working with regulators, governments and across industry, these are the areas outlined in Roadmap 2035: our blueprint for net zero.

Published in September last year and with 60 actions over those key areas, it sets out how we can realise the full potential of our industry through what we call the energy transition.

And many of those actions are already underway, supporting our members and the industry to realise fresh opportunities in tough times.

Earlier this year industry committed to targets to halve emissions from the operational production of oil and gas in the next decade, reaching a 90% reduction by 2040 and then achieving net zero by 2050.

Every week we hear stories of how our changing industry is embracing new opportunities. Many will be watching with interest the H2H Saltend project near Hull, as Equinor looks to develop the world’s largest plant capable of converting natural gas to hydrogen in combination with CCUS.

All the while, we continue to work to meet as much of the UK’s oil and gas needs with domestic resources, reducing our reliance on imports and taking responsibility for emissions associated with the production of the oil and gas we all need.

Over the next decade, the Southern North Sea is still expected to contribute to UK gas needs. Although it is the most mature region of the UKCS, the potential of the area remains clear.

New fields are being developed and will reach production in the coming years, with major fields starting production such as Neptune’s Cygnus field, and further developments are expected to come onstream such as Premier Oil’s Tolmount, Independent Oil and Gas’s Vulcan satellites and Blythe fields and Spirit Energy’s Pegasus field.


UK - Tolmount - loadout of topsides and jacket on barge 2New SNS fields reaching production in the coming years include Premier Oil's Tolmount, seen here under construction with its jacket and topside loaded out on a barge. Picture: Premier Oil

Working with our members, OGUK is making the case to government for a sector deal which could act as a catalyst for the roadmap, accelerating the transition and cementing our position in this new and exciting world.

Done right, and with the right support, delivery of our roadmap will mean we can continue to support hundreds of thousands of skilled jobs in energy communities across the UK.

It will mean that we produce the oil and gas the UK needs, and produce this with fewer emissions and a lower carbon footprint. At the same time, we will use the skills and expertise nurtured in our industry and apply this to offshore wind, carbon capture and storage and hydrogen, boosting the UK economy as we decarbonise.

We do live in uncertain and unsettling times. A managed and thoughtful transition towards a lower carbon future, which is supported by governments, regulators, and industry, could be part of the solution, providing the strategic directions companies need to invest in the UK now and for the long term.