The United Kingdom presents numerous opportunities for international oil and gas businesses across various sectors, including exploration and innovation. These opportunities are driven by the country’s established expertise and infrastructure in the energy sector.
The United Kingdom’s oil and gas industry has a rich history with over 50 years of experience in exploration and production. It is home to more than 800 oil and gas companies, making it a thriving hub for energy-related activities.
One of the key strengths of the UK industry is its focus on technically challenging methods of extraction and production. This focus on innovation and problem-solving has positioned the UK as an ideal location for research and development of new technologies in the field of oil and gas. Whether it’s improving the extraction processes or developing cleaner and more sustainable methods of production, the UK offers a wide range of opportunities for businesses in the energy sector.
The UK offers various market opportunities for international businesses across different sectors, including oil and gas. Here are some key areas of opportunity:
International oil and gas companies are expanding their operations in the UK to meet the growing demand. For example, Chinese oil and gas giant CNOOC International Limited has initiated production from the Buzzard Phase II development, and significant drilling activities are taking place in the UK.
The oil and gas sector in the UK benefits from specialized design and solution expertise provided by various businesses. Companies like Trant have extensive experience in the industry, serving both upstream exploration and downstream refining and storage.
International demand for natural gas is expected to grow substantially in the coming years. By 2041, global demand for gas is projected to reach around 5.5 trillion cubic meters, creating opportunities for oil and gas companies to meet this demand.
The UK offers opportunities in the delivery of green gases such as biogas, biomethane, and renewable hydrogen. The Green Gas Support Scheme (GGSS) provides financial incentives for new biomethane plants, while the Net Zero Hydrogen Fund supports the transition to a net-zero emissions economy.
These opportunities reflect the evolving landscape of the oil and gas industry, which is increasingly focused on sustainability and green technologies. The UK’s expertise and resource endowment position it as a favorable location for businesses looking to capitalize on future global demand and sustainable energy solutions.
The UK is committed to achieving net-zero greenhouse gas emissions by 2050, and the oil and gas industry plays a vital role in this transition. Government-backed organizations like the Net Zero Technology Centre (NZTC) support research and development efforts to drive the industry’s transformation.
Despite the global transition towards cleaner energy sources, the demand for oil and gas is expected to continue growing into the mid-2040s. The UK, as one of the few European nations with a substantial oil and gas extraction capacity, offers a valuable opportunity for companies to leverage its expertise and innovation in the sector.
Oil and Gas UK (OGUK)
OGUK, as the leading representative body for the UK offshore oil and gas industry, actively informs, engages, and champions the UK’s offshore oil and gas sector within the broader energy mix. They provide valuable networking and insights through their events and councils, connecting political figures, senior business leaders, and innovative companies across the industry.
The UK stands out in the field of engineering, with three of its universities ranking among the world’s top 10 for engineering. Furthermore, it was placed fourth in the 2021 Global Innovation Index. Various groups, including the Institution of Civil Engineers, play a vital role in facilitating networking opportunities that help individuals and businesses exchange technical and practical knowledge.
Natural Endowment and Exploration
The UK’s vast natural resources and exploration efforts are of considerable significance. According to the Oil and Gas Authority, the UK had proven and probable reserves totaling 4.4 billion barrels of oil equivalent (boe) by the end of 2020. Moreover, successful exploration activities in 2020 contributed an additional 212 million boe to the contingent resources. Organizations like the Petroleum Exploration Society of Great Britain are actively involved in promoting and supporting these exploration endeavors.
Global Underwater Hub (GUH)
The Global Underwater Hub (GUH) is an emerging and strategically focused organization that builds on the nearly 20-year legacy of Subsea UK. Expanding its influence and outreach, GUH is actively engaged in the UK’s underwater industry and related sectors, bringing together stakeholders to drive innovation and collaboration.
UK universities, in collaboration with industry, are at the forefront of advancing the energy sector’s transition to net zero through extensive research and development efforts.
Imperial College London, in partnership with the former BG Group, established the Sustainable Gas Institute (SGI). This institute takes a leading role by conducting interdisciplinary research and analysis concerning the applications of natural gas, hydrogen, and biogas in future low-carbon energy systems. The SGI contributes significantly to the drive for sustainable and low-carbon energy solutions.
The Net Zero Technology Centre (NZTC) operates the Innovation Network, which serves as a hub for connecting the British oil and gas industry, scientific institutions, technology centers, and innovators. The NZTC is actively engaged in identifying potential applications that can add value to the industry, thereby bolstering the UK’s research and development capabilities. Additionally, CATCH, an industry-led partnership in the Yorkshire and Humber region, plays a vital role in fostering collaboration, encouraging the exchange of knowledge, and ultimately driving innovation in the energy sector.
Furthermore, the UK government has allocated £11 million to support the implementation of biogas and hydrogen technologies in distilleries, promoting their adoption as cleaner and more sustainable energy sources. This allocation aims to reduce carbon emissions and facilitate the transition to net zero carbon operations in the distillery sector.
Business and government support
The UK government is actively supporting the oil and gas industry in its transition towards cleaner energy solutions. The North Sea Transition Deal is a significant initiative, involving an investment ranging from £14 billion to £16 billion by 2030, aimed at fostering the development and adoption of new energy technologies. This investment will be accompanied by the implementation of innovative business models that support the scaling of Carbon Capture, Utilisation, and Storage (CCUS) and hydrogen technologies.
In line with this commitment to cleaner energy, the UK has outlined its Hydrogen Strategy, which outlines the nation’s ambitions to lead in hydrogen technology on a global scale. Additionally, the Green Gas Support Scheme (GGSS) is actively promoting the use of renewable gases, such as biogas, biomethane, and renewable hydrogen.
Furthermore, in 2020, the oil and gas industry received a substantial investment of £3.7 billion, and this sector can anticipate an additional £21 billion in investment between 2021 and 2026. This substantial investment is expected to deliver a total of 2.7 billion barrels of oil equivalent (boe) over time. These efforts underscore the commitment of both the government and the industry to drive advancements in cleaner energy solutions and contribute to the nation’s transition to a more sustainable and environmentally friendly energy landscape.