OGA Says Continuing North Sea Exploration is Vital

UK Oil and Gas Authority (OGA) Chairman Tim Eggar has insisted that continuing North Sea exploration is vital.

“Oil and gas currently provide around three quarters of total UK energy consumption,” Mr Eggar said, speaking to delegates and the combined PROSPEX and PETEX conference in London.

“All forecasts, including the independent Climate Change Committee – point to them being required for heat, power and transportation for the foreseeable future,” he added in his speech.

“If we need to be reminded of their importance to daily life, we only have to look back a matter of weeks, when we saw long queues at petrol stations and a gas crisis which brought the prospect of higher gas bills for millions of consumers. Security of supply is back in vogue – not before time,” he went on to say.

The OGA chairman noted that the organisation’s own analyses show domestic gas production has less than half the carbon footprint of imported LNG.

“In fact, we can produce gas with a lower carbon footprint than almost all other producing countries,” he said in the speech.

“So it really makes no sense to be more reliant than we need to be on imports, particularly from countries with less to no commitment to reducing their emissions,” he added.

Mr Eggar also warned in the speech that the industry’s social licence to operate is “barely holding”.

“Failure to deliver the transition deal is not an option….These emissions targets should be viewed as the absolute minimum. Industry should look to smash these targets, not just meet them,” he added.

The OGA chairman said the OGA would continue to “hold industry to account on their side of the bargain by very closely tracking, monitoring and reporting on progress”.

In March this year, the UK government agreed a North Sea Transition Deal with industry, which includes targets to reduce emissions by ten percent by 2025, 25 percent by 2027 and 50 percent by 2030. The UK is also aiming to reach net zero emissions by 2050.

UK Must Allow New Fields

Earlier this week, industry body Oil and Gas UK (OGUK) highlighted an industry expert warning that the UK must allow new oil and gas fields or risk surging import bills and future shortages.

OGUK noted that if new projects like the Cambo field are not approved, then UK production would plummet with gas output, for example, falling up to 75 percent by 2030. The organisation outlined that this would leave the UK increasingly reliant on imported energy.

“The UK’s offshore oil and gas industry is committed to helping the UK government meet its ambitious net zero goals,” OGUK chief executive Deirdre Michie said in an organisation statement.

“We accept all the science around climate change and the need to cut emissions, but this transition must be managed. If we cut our own supplies of gas and oil faster than we can reduce demand then we will have to import more of what we need. Our import bills will go up without any reduction in emissions,” Ms Michie added.

“That means we need to develop new oil and gas reserves simply to maintain domestic production,” she went on to say.

According to OGUK’s latest figures, 74 percent of UK energy came from oil and gas in 2019. UK offshore oil and gas production fell from 1.7 billion barrels of oil equivalent in 1999 to 600 million barrels of oil equivalent in 2020, OGUK’s data shows.

The OGA’s role is to work with the industry and government on the economic recovery of the UK’s oil and gas resources, while also supporting the move to net zero carbon by 2050, according to its website.

OGUK is the leading representative body for the UK offshore oil and gas industry. The organisation informs, engages and champions the UK offshore oil and gas industry as part of a diverse energy mix, its website notes.

Source: Rigzone