Economic Report 2019

3.2 Contribution to UK Current Account As well as helping to provide energy security, the oil and gas industry boosts the UK’s international trade balance both by reducing reliance on imports and through the exports of goods and services from the domestic oil and gas supply chain.

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Figure 3: UK Current Account and Contribution of Oil and Gas Extraction

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Real UK Current Account

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-20

Current Account w/o Oil and Gas Indigenous Production

-40

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-60

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-80

-100

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Current Account (£Billion - 2018 Money)

-120

-140

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1998

2003

2008

2013

2018

Source: GOV

The UK economy’s current account — the difference between the value of goods and services imported and exported from the country, effectively the UK international trade balance — has been negative for more than two decades (i.e. more goods and services are imported than exported). The deficit in 2018 stood at £82 billion, but would have been significantly larger (£102 billion) without the impact of domestic hydrocarbon production. This means that without its indigenous oil and gas resources, the UK would have had to pay £20 billion for additional net imports of oil and gas to supply its energy demand in 2018 alone. There is also an additional impact in terms of the export of goods and services from UK supply chain companies. The most recent estimates, covering 2017, showed that the value of exports from the wider oil and gas supply chain amounted to £10.6 billion. 2 The industry has ambitions to increase exports from the sector to £20 billion over time as part of Roadmap 2035 (see section 5.1).

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2 EY OFS Report www.ey.com/uk/en/industries/oil---gas/ey-review-of-the-uk-oilfield-services-industry-january-2019

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