The British coalition government has announced the UK Oil and Gas Industrial Strategy, which demonstrates the country's renewed interest in utilizing reserves in the North Sea. The new strategy has been developed with the intention to help attract investors to fund new projects and to create thousands of jobs.
Overall, there are three main goals set down in the document. The strategy, which is jointly owned by the UK government and the UK oil and gas industry, aims to maximize the production and economic benefits of the country's offshore oil and gas resources. The second goal is to promote the growth of the British oil and gas industry's supply chain not just domestically but also in overseas markets. The third goal is to sustain effective collaboration among industry representatives and between the industry and the government.
Edward Davey, Secretary of State for Energy and Climate Change, commented that the oil and gas industry is a key strategic resource that helps the country meet its energy needs and makes it more effectively protected against the potential impact of volatile market conditions. The strategy will boost growth and contribute to improved energy security for Britain, he added.
The UK government and the oil and gas industry have not always worked toward a common goal, though. It was not long ago that the £10 billion tax raid, part of the 2011 Budget, brought relations between the two parties to their lowest point ever. However, this was also the time when the industry realized that it could not make plans independently of the government and that they had to work hand in hand to achieve growth. The government is going to play a more significant role in the oil and gas industry in future because of its role in aspects of the industry relating to climate change and economic factors, Oil Voice Magazine noted.
The new strategy aims to enhance the cooperation between the industry and the government not just in areas where they have traditionally been linked, such as licensing, environmental performance and health and safety, but also in areas where closer relations could be established, including technology, skills and access to funds, the document points out.
Meanwhile, several projects in the North Sea give an indication that the basin is regaining some of its lost appeal to investors. BP, for instance, is currently developing its £4.5 billion Clair Ridge project, located west of Shetland, which is estimated to be producing oil until 2050. Statoil recently announced a $7 billion (£4.6 billion) investment, which is the largest offshore project in the North Sea in more than a decade. With help from the government, the UK oil and gas industry will be looking for ways to further boost the interest of investors in the region, the strategy reveals.
The growth of the industry could be enhanced if plans by drilling company Trap Oil to use fracking techniques to extract oil from the clay below the North Sea receive the green light. Such a project has the potential to produce huge amounts of crude and could have a game-changing impact on the whole UK economy.