Economic Report 2017

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The current loǁ leǀel oĨ edžƉloration and aƉƉraisal actiǀity remains a serious concern as it is ǀital to reƉlenish Ɖroduction ǁith neǁ deǀeloƉment oƉƉortunities͘ The recently launched ϯ0th Oīshore Licensing Zound oīers comƉanies the oƉƉortunity to ďid Ĩor Ĩresh acreage and an interesting inǀentory oĨ yetͲtoͲďeͲdeǀeloƉed discoǀeries͘ ,oǁeǀer, it remains a challenge Ĩor comƉanies to ďe aďle to commit limited Ĩunds Ĩor edžƉloration actiǀity in the ongoing doǁnturn͘ Giǀen all oĨ the aďoǀe, ǁe should still taŬe conĮdence in our achieǀements to date as ǁe looŬ to the Ĩuture͘ The Ɖotential oĨ our industry is caƉtured in sision 20ϯϱ, ǁhich shoǁs that the UK can continue to deliǀer hundreds oĨ ďillions oĨ Ɖounds in reǀenue through the oil and gas sector oǀer the nedžt generation and ďeyond͘ thile seƫng us the challenge oĨ madžimising the ǀalue oĨ our indigenous resources, sision 20ϯϱ also seeŬs to ensure our sup p ly ch ain m aint ains a st r ong UK b ase w h ile p ur suing a gr e at e r sh ar e of t h e glob al e ne r gy m ar ke t . tith this longerͲterm ǀieǁ, the UK ^ needs to continue to comƉete ǁith other oil and gas Ɖroducing regions as ǁell as Ɖromote the contriďution that oil and gas can continue to maŬe to the energy midž oǀer decades to come͘ The UK ǁill need to ensure its energy suƉƉly is secure, aīordaďle and as loǁͲcarďon as economically Ɖossiďle, and our indigenous oīshore oil and gas resources haǀe a Ŭey contriďution to maŬe͘ Gloďal oil and gas demand is Ĩorecast to rise ďy 2ϱ Ɖer cent ďetǁeen noǁ and 20ϯϱ, and so ǁill continue to haǀe a crucial role to Ɖlay in satisĨying the ǁorld͛s need Ĩor energy͘ The UK eƉartment Ĩor usiness, nergy & Industrial ^trategy conĮrms that oil and gas ǁill remain ǀital sources oĨ energy ʹ Ĩuelling transƉort, Ɖoǁer generation, heating and industrial usage ʹ Ĩorecasting that it ǁill suƉƉly around tǁoͲthirds oĨ domestic energy demand in 20ϯϱ͘ Industry continues to maŬe a conǀincing case that the sector should ďe at the heart oĨ the UK Goǀernment͛s Industrial ^trategy͘ The strategy should recognise the sector͛s signiĮcant contriďution to the economy through indigenous Ɖroduction that loǁers imƉort reƋuirements, through generating edžcheƋuer reǀenues, ďy Ɖroǀiding emƉloyment Ĩor hundreds oĨ thousands oĨ sŬilled ƉeoƉle across our suƉƉly chain, and deliǀering a secure suƉƉly oĨ energy͘ A sƉeciĮc ^ector eal Ĩor the oil and gas industry ǁill also ďe needed and ǁe are ǁorŬing closely ǁith many other organisations to deǀeloƉ a coherent ďusiness case͘ It is cr ucial t h at indust r y and gov e r nm e nt w or k t oge t h e r t o e nsur e t h at as m uch of t h e UK’ s e ne r gy ne e ds as Ɖossiďle are met through domestic resources͘ Last year, ά17 ďillion ǁorth oĨ oil and gas ǁas Ɖroduced Ĩrom the UKC S. T h e focus on de v e lop ing as m uch of our nat ur al r e sour ce as p ossib le is an op p or t unit y t h at ne it h e r t h e industry or the goǀernment can aīord to Ĩorgo͘ There is a comƉelling need Ĩor a clear energy Ɖolicy Ĩrom goǀernment, ǁhich can Ɖroǀide the longͲterm clarity and ce r t aint y ne e de d t o h e lp se cur e inv e st m e nt in oil and gas in t h e UK.

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Deirdre Michie, Chief Executive, Oil & Gas UK

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