Strong UK-EU Oil and Gas Ties Should Endure Post-Brexit
Despite the United Kingdom’s formal withdrawal from the European Union on the 31st January 2020, the strong relationship the country’s oil and gas industry enjoys with partners in the EU should continue post-Brexit, data and analytics firm GlobalData predicted on the 31st January.
“It is highly likely that the UK will aim to prevent any disruptions to oil and gas arrangements currently in place with EU countries,” GlobalData Oil and Gas Analyst Daniel Rogers commented in a written statement.
Illustrating the UK oil and gas industry’s reliance on its neighbours in the EU, GlobalData pointed out that 13 percent of the UK’s total natural gas imports in 2018 arrived via pipelines from Belgium and the Netherlands.
Also, citing UK government data, the firm observed that UK gas exports to Ireland hit a four-year high last November and should continue to grow as Ireland’s domestic supply declines.
In the event of a post-Brexit pound sterling devaluation against the Euro, imported EU-piped gas would become more expensive for UK consumers, Mr Rogers said.
“That being said, alternative avenues of gas imports such as international liquefied natural gas create flexible alternatives of energy security for the UK and the gas market will continue to remain competitive while playing a vital role in the UK’s energy mix,” he continued.
Referencing more UK government figures, GlobalData stated that 63 percent of the UK’s crude oil exports in 2018 – valued at £10.8 billion – went to EU countries.
Noting that Germany and the Netherlands accounted for most of the export volume, the firm asserted that securing reasonable cross-border agreements and preserving export ties with the EU will be critical for the UK.
“In the North Sea, there is a number of oil and gas fields either straddling country borders or utilising cross-border infrastructure,” Mr Rogers observed.
“Past collaborative efforts particularly between the UK, Norway and the Netherlands have enabled cross-border developments and generated value for the UK oil and gas industry, something which is unlikely to change as a result of Brexit.”
Source: Rigzone