Oil & Gas UK Responds to Select Committee Report on UK Deepwater Drilling
Oil & Gas UK has welcomed the Energy and Climate Change Committee's rejection of both the calls for a moratorium on offshore drilling in the UK Continental Shelf (UKCS) and increased regulatory oversight from the European Commission in the Committee's report published today into UK deepwater drilling.
The UK industry's leading representative body further notes that the Committee agrees that the regulatory regime on drilling in this country is robust and tougher than that applying in the Gulf of Mexico.
The report makes various recommendations for improvement which Oil & Gas UK and the industry will of course now consider.
Malcolm Webb, Oil & Gas UK's chief executive, said:
"Oil & Gas UK welcomes the Committee's clear statement that a moratorium on drilling in the UK is not only unnecessary but would also undermine UK energy security. We also warmly welcome the Committee's utter rejection of calls for increased regulatory oversight from the European Commission, which we believe could weaken the UK's strong regulation and safety performance.
"The review being carried out by the Oil Spill Prevention and Response Advisory Group (OSPRAG), comprising industry, regulators and trade unions, has also confirmed that the UK Safety Case regime drives the right behaviours and furthermore OSPRAG has already made significant progress in addressing a number of the concerns raised by the Committee, including the design of the new capping system capable of dealing with sub-sea blowouts, the development of which the Committee specifically welcomed.
"There are in the report a number of detailed recommendations (such as that for two sets of blind shear rams on blowout preventers) and observations (such as the perceived lack of clarity on the identity of parties liable for offshore incidents) which we do not entirely support. We will write to the Committee with our views on these matters shortly."
Published 06/01/2011
The UK oil and gas industry makes a very significant contribution to the economy:
- UK oil and gas today supplies around two thirds of the country's total primary energy demand
- The UK is currently the world's 16th largest overall producer of oil and gas, producing 900 million barrels of oil equivalent in 2009 and world leader in offshore engineering
- Total tax paid to date is £276 billion; oil and gas contributed one fifth of corporate tax in 2009-2010 (£6.4 billion) and in 2010-2011 is expected to contribute £9.4 billion; activity in the supply chain contributes a further £5-6 billion in payroll taxes, NICs and corporation tax
- Total spend in UK offshore to date is £438 billion; the industry was the largest industrial investor in 2009 and investment in 2010 approached £6 billion
- Without indigenous oil and gas production, the UK balance of payments deficit would have been £27 billion worse off in 2009
- The industry employs 440,000 people across the UK but 44% of it is in Scotland; much of this employment is engineering and technology driven, with average earnings of £50,000pa and paying average payroll taxes of £20,000pa
- The turnover of the UK oil and gas supply chain in 2009 was £17 billion (£12 billion generated by UK sales and £5 billion from exports of oilfield goods and services)
OSPRAG Established shortly after the incident in the Gulf of Mexico, the UK's Oil Spill Prevention and Response Advisory Group (OSPRAG) is the focal point for the sector's review of the industry's practices in the UK.
Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its members, which number over 100, are companies licensed by the Government to explore for and produce oil and gas in UK waters and those who form any part of the industry's supply chain.
Find out more about:
OSPRAG (Oil Spill Prevention and Response Advisory Group) »
Oil & Gas UK »
Search for more News
FURTHER READING
