Managing decline

North Sea ‘needs investment’ to meet net zero targets

BP Clair Ridge

North Sea decline is now being managed

The transition of the North Sea oil and gas industry to a green energy future will depend on government encouraging continued investment, according to the sector’s trade body.

Ross Dornan, market intelligence manager at Oil & Gas UK, warned that halting new exploration licences, as UK ministers are said to be considering, and deterring investment in new projects would harm Britain’s capabilities and the development of new technologies.

Mr Dornan, speaking ahead of OGUK’s 2021 Business Outlook report, said any erosion of government support would also make Britain more reliant on imports could affect how investors view the UK.

He said the North Sea Transition Deal was a partnership between the industry and government that would act as a catalyst to unlock investment and jobs.

He said details would emerge in the spring and that there had been “constructive progress in a number of areas”.

After the dip in demand caused by the pandemic he said the oil and gas industry was now looking at managing decline.

“There was a 20% increase in production between 2015 and 2019, but we have not seen the same level of investment, so we do envisage that the basin will revert to decline, though we did not see it being so fast,” he said.

“Towards the middle of the decade there will be stabilisation, but longer term there will be decline and it is important we manage that decline.”

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