The UK could produce half of its projected demand for oil and gas domestically under the “right business conditions”, reducing an increasing reliance on more carbon-intensive imports.
Offshore Energies UK said the country is on track to produce four billion of the near 15 billion forecast for use by the independent Climate Change Committee, in line with the UK’s 2050 net zero emissions pathway.
But the North Sea could produce another three billion barrels if companies were encouraged to invest, adding £150billion of economic value over the £200billion forecast under current plans.
The 2025 Business Outlook Report coincides with government consultations with industry on the future of the North Sea and the oil and gas fiscal regime.
In the coming months interlinked decisions are also expected on the UK Government’s Comprehensive Spending Review and new Industrial Strategy as well as updated environmental guidelines for oil and gas projects.
The report shows that by making most of homegrown oil and gas while accelerating renewables and low-carbon solutions the UK can carefully manage its reliance on imports.
OEUK says this pragmatic approach will enable the UK to retain its world class energy supply chain, following a survey by OEUK showing nine out of ten such companies are looking for investment opportunities outside the UK in countries with more favourable business environments.
As the geopolitical outlook remains uncertain, the report details how the UK’s total energy production hit a record low last year and imported over 40% of total energy needs from abroad.
OEUK chief executive David Whitehouse said: “The future of the North Sea is in our hands. Our report shows as we work together to accelerate renewables the UK must make the most of its own oil and gas - or choose to increase reliance on imports. We’re fully engaged with asking policy makers to choose a pragmatic path to the low carbon, high-growth and secure economy we all want to see.
“Energy security is national security. In an increasingly volatile world the widening gap between the energy we produce and what we import matters. Secure homegrown oil and gas alongside renewables pays taxes, supports jobs and safeguards the supply chains we need to build our energy future.”
“The Climate Change Committee says to get to net zero by 2050 the UK needs 13billion to 15billion barrels of oil and gas equivalent. Today, we’re on track to produce only 4billion of those barrels in the UK, but with the right polices to encourage firms to invest we could unlock another 3billion barrels and meet half our entire needs. This would add £150billion of gross value to the UK economy, on top of £200billion of economic value from current plans.
“Energy security is national security. In an increasingly volatile world the widening gap between the energy we produce and what we import matters. Accelerating offshore wind, carbon capture and hydrogen alongside homegrown oil and gas pays taxes, supports jobs and safeguards the supply chains we need to build our energy future.”