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    OEUK says UK must spend to maintain output


The trade body's intervention comes after Scotland's first minister called increased UK North Sea output "impractical".

by: Callum Cyrus

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OEUK says UK must spend to maintain output

Trade body Offshore Energies UK (OEUK) responded on March 10 to Scottish parliamentary calls for greater North Sea production, arguing that money should instead sustain current output as far as possible given the region's declining status, and the need to support the energy transition.

The body's CEO Deirdre Michie said a "fair and managed" energy transition meant "both rapid investment in renewable energy plus investment to sustain the production of oil and gas."

"This is because production from the North Sea continues to decline, and without fresh investment, we will only increase our reliance on oil and gas imports while we go through the energy transition," she added.

Scotland's former energy secretary Fergus Ewing has called for North Sea output to be boosted to lessen Russian influence on energy prices, with the cost of living rapidly rising up the UK's political agenda. But current first minister Nicola Sturgeon labeled the idea "impractical". Speaking to a Q&A session in the Scottish parliament March 10, Sturgeon advised the industry to continue tackling "the transition away from fossil fuels."

Michie's thesis of a North Sea basin in managed decline was borne out by Shell's exit from Cambo oil and gas field, west of the Shetland Islands, late last year. Development of Cambo would have yielded 175mn barrels of oil and 50bn ft3 of gas over its productive life, but is now on ice and opposed by the first minister. Sturgeon's opposition might seem somewhat ironic, given how oil revenues were the calling card for the pro-independence movement in 2014. 

Cambo's operator Siccar Point Energy must now work to revive interest in the development. It has held an operated stake in the field since buying it from OMV UK's E&P subsidiary in 2016, but the latter's exit was further proof that interest in the UK North Sea had diminished.

While the UK offshore industry already invests in renewables like wind power, and new fuels like hydrogen, Michie said 85% of UK homes still rely on natural gas.  Oil products still fuel 32mn British vehicles. Cleaner oil and gas would be one piece of the energy transition jigsaw, Michie added, but must be balanced with efforts to harness offshore wind, and other renewables.