UK oil and gas industry ‘needs £200 billion of investment’ for future development

A total of £200 billion needs to be spent by exploration and production companies to exploit the UK oil and gas sector’s remaining potential fully, a new report has said.

Industry body Oil and Gas UK (OGUK) said its Business Outlook Report 2019 showed the need for a focus on cost and efficiencies was the ‘new reality’.

The study reveals production has increased by 20% over the past five years. This follows 14 years of decline.

The report found 62% of contractor companies had an improved outlook for 2019, but that many areas of the supply chain were still facing challenges.

The £200 billion figure is seen as pivotal for ‘adding a generation of productive life’ to the area.

OGUK chief executive Deirdre Michie said the report showed that industry’s approach during the downturn was delivering results.

She said: “Following 14 years of decline, production has increased by a fifth over the past five years. Cost improvements are being sustained and there is building momentum around exploration, with more new opportunities being drilled and the largest two conventional discoveries for a decade made in the second half of 2018.

“Our report finds an industry that’s getting better at what it does, getting smarter in how it does it and is well positioned to deliver attractive returns on investment within this environment, maintaining our global competitiveness.

“This is the new reality and we need to embrace it.”

Source: Energy-pedia