THE NORTH SEA TRANSITION AUTHORITY (NSTA) awards 24 new oil and gas licences, fostering the UK’s energy transition. Offshore Energies UK highlights the potential for strengthened energy security amid the sector’s expansion into wind, hydrogen, and carbon capture and storage.
Offshore Energies UK’s CEO, David Whitehouse, emphasises the crucial decision facing the nation in this election year, stating, “‘We can build a homegrown energy transition by backing our people, our offshore firms and our world-class supply chain, or we can import even more energy and fail to grow our new wind, hydrogen and carbon capture industries.”
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The 33rd licensing round by NSTA is pivotal for an industry supporting over 200,000 jobs across the UK. Whitehouse underscores the long-term impact of policy decisions, asserting, “Our energy security, economic growth, and hundreds of thousands of jobs in almost every parliamentary constituency up and down the UK are at stake.”
As the North Sea basin faces a natural decline with 180 of 280 oil and gas fields ceasing production by the end of the decade, the issuance of new licences becomes imperative for an orderly transition. Whitehouse explains, “We need the churn of licences for an orderly transition that supports jobs and communities across the country and meets our energy needs.”
Offshore Energies UK is collaborating with political parties to build awareness of the sector’s strategic importance. Whitehouse highlights their industry manifesto, stating, “OEUK’s industry manifesto, which details how this transformation can be achieved, will be published later this month.”
Fast Facts on Licensing:
- Active Fields: Over 280 active oil and gas fields in the North Sea, with 180 set to cease production by 2030.
- Importance of New Licences: Without fresh investment, the UK could rely on oil and gas imports for 80% of its needs by 2030.
- Replacement of Reserves: In 2022, the UK only replaced 3% of production with new reserves, raising concerns about future supply.
- Role of UK Oil and Gas: Around 75% of the UK’s total energy comes from oil and gas, with half of UK gas originating from the North Sea.
- Net Zero Considerations: New oil and gas licences contribute to reducing the rate of declining UK supplies, aligning with the UK’s net-zero goals.
- Licensing Process: Licensing involves various activities, from seismic exploration to production, and is crucial for managing energy projects in the UK.
Whitehouse concludes, “There is a constant churn in domestic production, meaning as reserves are depleted, licensed production is decommissioned, and new licenses are required to simply maintain the rate of decline.” The heavily regulated regime ensures strict adherence to commercial, environmental, and health and safety conditions in the oil and gas sector.
