ing firms, and consultants based across Britain.
The supply chain itself makes a significant and growing
economic contribution. Its expertise is in strong demand internationally, boosting the number of jobs in the UK supported by the industry to 440,000 in total. Contractors pay
£ 6 billion/year in corporate and payroll taxes.
In short, the offshore oil and gas sector plays an important role in maximizing the potential of the region’s hydrocarbon resource bringing benefits to the UK’s economy and
long-term energy security, as well as developing the technical expertise which is in high demand globally.
With a tax regime that is working to promote further investment in oil and gas production, the UK economy as a
whole is well-placed to reap significant rewards across the
Some 70% of new UK developments make use of subsea
technology, and according to Subsea UK, it’s a sector of the
supply chain now worth £ 8. 9 billion. UK based companies
now dominate the world-wide stage with 45% of the £ 20
billion global market and 66,000 jobs are supported across
Britain. Moreover, the sector could grow to £ 11. 1 billion revenues by 2016.
The UK’s advanced and robust health and safety and environmental management regimes have also supported development of the well services sector, which grew by 10% to
£ 1. 9 billion revenue last year.
In fact, the expertise of Britain’s service sector is internationally renowned and in growing demand around the
world, with exports of around £ 6 billion/year. This undoubtedly helped towards the sector’s 17% growth in revenue last
year according to a recent report from Ernst & Young.
Potential of the industry
If oil and gas demand were satisfied through imports, it
would be at significant extra cost to the economy. We are
fortunate, therefore, that up to 40% of the UK’s resource,
supplied from our own reserves, still remains to be extracted.
Latest figures show oil and gas produced in the
UK’s waters meets 68% of the country’s demand
for oil and 58% of its demand for gas—over half
of Britain’s primary energy needs. Oil and gas will
continue to be in demand as they are estimated
to likely satisfy 70% of energy needs well into the
2040s, underlining the need to make the most of
the natural resources around the UK.
Heading in the right direction
Following constructive engagement between the industry
and government, senior political figures have provided several signals of support.
The expansion of tax allowances, the provision
of certainty on decommissioning tax relief, and the
publication of the UK and Scottish governments’
industrial strategies for the oil and gas sector are
important milestones and will support economic
activity across the country for many decades.
Record investment of over £ 13 billion is forecast this year, sustaining growth across the supply
chain and reinforcing the industry’s already significant contribution to the UK economy.
Such success, however, does not come without
challenges. A steady and growing supply of highly skilled
people is needed to continue to drive innovation in the industry, enabling ever more difficult reserves to be recovered
Finding a sufficient number of skilled people is routinely
cited as companies’ biggest challenge. A lack of awareness
among the general public about the industry’s economic and
technological contribution and the exciting careers it offers
can prove an obstacle in this endeavor.
The industry is working towards finding the people required to apply leading technologies which will improve the
efficiency of operations and to call a halt to the production
decline of recent years.
Also, in order to raise awareness and understanding of the
oil and gas industry and better map its contribution across the
UK, Oil & Gas UK recently launched a campaign, “Energising
the Nation’s Future,” supported by the UK government.
Oil & Gas UK is encouraging those who work across the
industry to get involved in the campaign by registering their
interest at its web site ( energisingthenationsfuture.co.uk),
mapping their location and relationship to the sector, and
sharing their experiences.
Supply chain prospects
More than 40 years of exploration and production operations in the UK have resulted in a supply chain that offers a
unique array of products, services and expertise, developed
in one of the world’s most challenging offshore environments; physically and economically.
The contractor community, which now generates £ 27 billion a year in total revenue, has capabilities across the oil
and gas life cycle including in seismic surveying, exploration, engineering and design, fabrication, production, maintenance, and decommissioning.
Operating in a mature province has meant that Britain’s
oil and gas industry has developed expertise to extend infrastructure life and maintain asset integrity in particular.
Companies are now working on ground-breaking programs
right across the industry, pushing the boundaries of technological innovation. The industry’s strengths in this area will
enable it to effectively manage aging in all types of assets and
export knowledge to an international market.
The UK is also at the forefront of finding cost effective
ways to develop oil and gas and maximize the recovery of
hydrocarbons, advances in subsea technology being just one