UK Could Exceed Oil Output Forecast by 30% with Investment
The UK oil and gas sector anticipates a potential surge of nearly 30% in production if it can secure approximately £20 billion in new investments by the end of the decade, reports industry group Offshore Energies UK (OEUK).
Potential Production Increase
OEUK highlights that with adequate investment, the UK could significantly increase its daily oil and gas production, countering projections of decline. Current daily production of 1.2 million barrels of oil equivalent will drop to 0.7 million barrels by 2030 without intervention, but to 0.9 million barrels per day with strategic investments.
Industry Warning Ahead of Elections
The industry's call for investment comes amidst political uncertainty, with the UK general election looming. Opinion polls suggest Labour Party leader Keir Starmer could potentially replace Conservative Prime Minister Rishi Sunak. Labour's proposed policies include halting new oil and gas exploration licenses and increasing the windfall tax on fossil fuels.
Impact of Political Decisions on Industry Future
OEUK warns that a lack of investment could lead to a drastic reduction in production, down to 0.6 million barrels equivalent per day by the end of the decade. The industry emphasizes the need for favorable government policies to sustain current production levels and support future development of remaining oil and gas reserves.
Economic and Employment Implications
The oil and gas sector remains a significant contributor to the UK economy, supporting approximately 120,000 jobs directly or indirectly. OEUK underscores the sector's importance in sustaining highly skilled employment and argues for policy measures that facilitate continued investment and development while addressing climate compatibility concerns.
Future Prospects and Calls to Action
Looking ahead, OEUK asserts that unlocking the full potential of remaining oil and gas resources requires policy support, including removing windfall taxes before 2029 and integrating climate checkpoints into licensing decisions. The industry estimates a potential spend of £144 billion through 2040, encompassing field decommissioning and future exploration efforts.
