Economic Report 2018

ECONOMIC REPORT 2018

5. The UK Oil and Gas Industry – A Competitive Investment Proposition

In Summary T he UK oil and gas industry operates within a highly competitive global market. Quite simply, to attract new investment, the opportunities on the UKCS must be competitive in an international context or the UK will lose out to other basins. The UKCS has made significant progress in improving its cost performance in recent years, however the competitiveness of the basin should be considered in a much wider context than just cost. There needs to be a focus on the total value that can be gained from an investment.

Any assessment of competitiveness takes a range of factors into account including:

The availability of infrastructure to service the project

The total costs from exploration through, development, operations

The scale of the resource base and prospectivity of opportunities

and ultimately decommissioning

The ability to secure access to finance

The fiscal competitiveness of the basin

The regulatory competitiveness

The people and skills to manage and

execute projects and ongoing operations

The capability of the supply chain to service demand

The UKCS is currently in a good position across all of these areas, which combined mean that the UKCS can compete against the most attractive comparable basins for access to investment and in terms of overall returns. It is vital that the industry is able to sustain this improved competitive position.

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