Offshore Energies UK’s flagship 2025 Business Outlook report being launched at a business breakfast event in Aberdeen today shows that under the right business conditions half of the 13-15 billion barrels of oil and gas the UK is projected to need by 2050 could be produced at home.
This would add up to £150billion of gross value to the UK economy on top of the £200billion from planned production, safeguarding energy security, jobs and lower carbon emissions alongside an acceleration of renewables.
The independent Climate Change Committee estimates the UK requires 13-15billion barrels of oil and gas by 2050, the target date for the economy to achieve net zero. The UK is on track to produce 4billion of these barrels. Yet the report finds with the right polices to encourage firms to invest, another 3billion barrels could be produced at home to meet half of the UK’s needs rather than increasing its reliance on imports.
The report also finds that by 2050, when UK electricity demand has more than doubled, oil and gas will still form a fifth of UK energy needs.
The cost of energy is critical to wider industrial strategy and economic success. Maintaining homegrown gas supplies is key for the UK’s industrial base.
Publication of the Business Outlook 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.
In launching its consultations, the government committed to meaningful engagement with industry. OEUK has said this continued engagement is critical to creating the globally competitive business environment needed to anchor high value jobs and investment in the UK. The spending review is critical for key projects including those in the Track-2 of carbon capture and storage projects, which can help futureproof UK heavy industry by stripping out and locking away its carbon emissions.
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.”
The breakfast event to launch the report is sponsored by Deloitte NSE.