Monday 17 November 2003

UKOOA Responds to Ofgem Statement on gas prices

The UK Offshore Operators Association notes Ofgems statement on gas prices.

Mike Tholen, UKOOAs Economic and Commercial Director, said:

Short term variations in price are a natural result of a functioning market.

It should be noted that around 75 per cent of the gas produced in the UK is sold on long-term contracts, predominantly at the beach rather than at the National Balancing Point (NBP). Producers have little direct involvement with gas trading at the NBP which represents the spot gas traded market.

However, a review of the reasons behind NBP price volatility should take into account the fact that October was an unusual month. Lower than normal temperatures drove up the demand for gas, there were significant volumes of gas being shipped through the Interconnector to meet Zeebrugge nominations

and production from a number of important gas fields was hit by a series of unexpected outages.

There does appear to be greater jitteriness in energy markets generally, as a result of various events during the year.

-ends-

Note to Editors

The UK Offshore Operators Association is the representative body for offshore oil and gas exploration and production companies in the UK. It has 29 members.

For more information, please call 020 7802 2400.