Energy Minister Mike O’Brien announced yesterday that the UK Government would spend more than £5million over three years on studies on the future of the North Sea oil and gas industry.
Mr O’Brien said consultants would be hired to look at options throughout the UK continental shelf (UKCS) and the studies would include how to create opportunities to access technically more difficult fields.
He also indicated on a visit to Aberdeen that other issues to be considered would be the right regulatory regime and the best ways to encourage companies to be active in British waters.
A budget of £1.7million a year for three years had been set for the studies, which will go out to tender shortly.
Mr O’Brien, who was appointed to his post on October 2 when the Department of Energy and Climate Change was created, had held the role of energy minister previously in 2004-05, however, yesterday was his first visit to an offshore platform: on the giant Nexen-operated Buzzard field in the North Sea.
He told the Press and Journal that he had spent four hours on the platform talking to staff, and described the technology and investment as pretty impressive. He said Buzzard – which provides about 10% of the UK’s oil – had turned out better than anyone expected in terms of its production.
Mr O’Brien also said stories of the death of the North Sea oil and gas industry were more than premature, with decades of production still ahead and the mature province still providing about 70% of the country’s primary energy needs.
He added: “You get your Buzzards but we also want to access smaller and more difficult reserves such as stranded reserves and heavy oil.
“That is why in the pre-Budget report we announced that if operators can show they are putting investment and activity into accessing these types of reserves they will get tax discounts.”
Mr O’Brien said he was very pleased to have been able last month to announce a successful 25th offshore licensing round, with record interest from companies wishing to exploit the UK’s considerable oil and gas resources, despite falling oil prices. He said at the time that 171 licences to explore for oil and gas in 257 blocks had been offered, compared with 150 licences a year ago.
The minister said key to that interest was stability for the industry in taxation and regulation, adding: “Britain is still a very positive place to be for the oil and gas industry.”
A spokeswoman for the industry body Oil and Gas UK said last night that any commitment from Mr O’Brien’s department that might boost investment in the North Sea was to be welcomed.
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