Trade body Oil and Gas UK (OGUK) has estimated that £200bn is needed to improve ageing North Sea oil and gas infrastructure over the coming 16 years.
OGUK’s Business 2019 Outlook warns that the UK North Sea oil and gas industry faces “fundamental challenges” and that a huge amount of private investment is needed between now and 2035.
Challenges facing the industry include increasing pressure to cut carbon emissions, a factor currently acting as a catalyst for the renewables market.
IN all £100bn is needed to support ongoing extraction and processing. A further £30bn is needed to support companies already at work extracting of 2.5bn barrels of oil from new sites.
Of the £200bn total, £40bn, must be spent on fresh exploration of the North Sea and installation of new infrastructure to extract 2.4bn barrels of oil from sites not already under consideration.
Another £25bn is needed for decommissioning ageing assets and there is a suggestion that retired gas and oil pipelines could be turned into carbon capture systems.
OGUK chief executive Deirde Michie said that the North Sea would have strong economic potential for years with right amount of support.
“In extending the productive life of the basin, around £200bn will need to be spent in the coming years in terms of finding, developing and operating the reserves of the future,” she said.
“This is an attractive opportunity that can stimulate activity and revenue for both the supply chain and engineer and procure companies and contribute positively to the UK economy for years to come.”
The report comes as Westminster MPs continue to voice calls for a new government backed sector deal, titled Vision 2035 to support research and development for the North Sea oil and gas sector.
The £176M sector deal would result in the government partnering with the private sector to deliver new innovation centres, reduce the industry’s carbon footprint and ensure the skill base is retained.
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