The offshore oil and gas industry has called on the Government to boost incentives for North Sea exploration so that up to 25 billion barrels of oil and gas can be recovered.
Oil & Gas UK, which represents the offshore industry, said yesterday that companies planned to invest £21bn in the next five years, targeting about 2.7 billion barrels on top of the 7.1bn currently on stream. But it said extra investment was needed to secure the rest of the fuel.
In a report, Oil & Gas UK said that in the past seven years prices for the fuels had risen nearly threefold but that the industry's costs had also risen dramatically in the UK. The cost of developing a barrel of oil on the UK continental shelf has jumped fivefold with the operating cost doubling.
The industry spent £12.4bn in 2007 on exploration, development and production, the same as in 2006. But the money spent on bringing new reserves into production fell to £4.9bn from £5.5bn a year earlier.
Malcolm Webb, Oil & Gas UK's chief executive, said: "There is little doubt that the need to maximise recovery of the UKs remaining oil and gas reserves is a matter of national importance and one that is well understood by Government at the highest level.
"Barrels left in the ground do not pay taxes, do not sustain jobs, do not help secure the nation's energy supply and provide no support to the country's balance of payments.
"We look forward to continuing discussions with the Treasury on ways to increase the competitiveness of the UK oil and gas basin and how targeted incentives might boost investment in the UKs oil and gas reserves."
The industry will pay £21bn in tax on production and supply chain this year and the value of oilfield goods and services exports will be up to £5bn, the industry group said.Reuse content