Economic Report 2019

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The strength of the supply chain is also key to the competitive proposition of the industry. Although the UK market is returning to growth, the sustainability of some companies remains fragile. Both operators and contractors need to work together, constructively, to ensure an appropriate balance of risk and that all companies realise value from their investments. OGUK has developed a new set of Supply Chain Principles with its members, uptake of which can help ensure the ongoing sustainability of the basin. Industry’s focus on its environmental performance, including its carbon footprint, is key to achieving a sustainable industry as we look to a net-zero future. In recent years progress has been made in managing emissions intensity from the production of oil and gas, but more can be done. Offshore oil and gas production operations currently account for around 3 per cent of the UK’s total greenhouse gas emissions, however the majority of emissions from the wider economy are from the use of oil and gas products. The UK’s location and geology mean that it has a competitive advantage when it comes to large-scale emissions mitigation programmes such as Carbon Capture, Usage and Storage. The oil and gas industry also has the skills, capabilities and expertise to be a key partner in the development of this technology at scale, however it is important that governments ensure that the correct commercial and regulatory frameworks are in place to allow this. There are also other energy opportunities which oil and gas companies are already actively exploring, supporting and investing in, including hydrogen, wind, wave, solar and geothermal power. We are an industry in action, providing secure and affordable energy, contributing billions of pounds to the UK economy and supporting hundreds of thousands of skilled jobs. We are playing an active role in the energy transition and the net-zero economy and with the right support, we are well placed to help realise the benefits it can bring to our economy and to our society.

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We know that it will be a huge challenge, but it is one that we are ready to take on.

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Deirdre Michie, Chief Executive, OGUK

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