Deirdre Michie, chief executive of Oil & Gas UK
Almost $6bn worth of mergers and acquisitions have taken place in the UK oil and gas sector in the first half of the year, a new report reveals.
Assets changing hands and the increasing diversity in their ownership suggests that the UK Continental Shelf may start to benefit from investment boost, says Oil & Gas UK’s Economic Report 2017 – the trade body’s annual review of industry performance and outlook.
Although market conditions remain difficult, the report demonstrates that the UK sector is reinventing itself, differentiating its offering from competing oil and gas provinces with its efficiency gains, fiscal competitiveness and supply chain.
This transformation is restoring the UK’s position as an attractive basin for investment – and one still supporting over 300,000 jobs in the UK.
The challenge now is to ensure this renewed interest in the basin translates into tangible activity that could help unlock around £40bn worth of potential development opportunities known to be in company business plans.
The Economic Report also shows that the cost of lifting oil from the North Sea has almost halved since 2014 and production has increased by 16% since 2014.
Deirdre Michie, chief executive of Oil & Gas UK, said: “Despite our difficulties, we’ve got more reasons to be positive and some great stories to tell that demonstrate the real progress that we are now making.
“Our sector is successfully re-positioning through efficiency and cost improvements. We are transforming in a way that is getting UK oil and gas back in the game.
“We are increasingly being seen as a much more attractive basin in which to invest with further M&A activity expected over the remainder of this year and into the next.
“Although we are getting to a much better place, we still need further investment to generate new activity and sustain hundreds of thousands of UK jobs.
“With global oil and gas demand forecast expected to rise by 25% to 2035, we have a crucial part to play now and during the transition to a lower carbon future.”