Friday 15 February 2002

UKOOA Welcomes PIU Energy Review

The UK Offshore Operators Association (UKOOA), the representative body for UK oil and gas exploration and production companies, welcomes the publication today of the PIU Energy Review (14 February 2002).

UKOOA recognises the need for the Government to review energy policy in the light of the maturity of the UKCS and the need to maintain diversity and security of supply. It also welcomes the PIUs acknowledgement that oil and gas will continue to contribute significantly towards Britains fuel mix for many years to come.

James May, UKOOAs director general, said: Even with other forms of energy playing a larger role in the future, the UK will continue to rely on oil and in particular gas as its major sources of energy for many decades to come.

Natural gas is the most efficient form of power generation and has, more than anything else, put the country well on its way to meeting its Kyoto commitments.

The UK currently meets around 85 percent of its energy needs from its own reserves of oil and gas. The countrys remaining reserves are considerable, estimated at 26-34 billion barrels of oil equivalent, about as much again as has been produced since the Industry first emerged in the late 1960s.

Maximising recovery of the UKs remaining indigenous reserves and prolonging activity in the North Sea is a priority recognised and supported by Government through the PILOT initiative. Equally important is the timely investment in network capacity to accommodate current and future supplies of gas from various sources. Both require fiscal and regulatory stability, creating the right market conditions that are conducive to investment.

Diversity of supply at competitive prices is fundamental to achieving security of supply. North Sea oil and gas have a major role in maintaining that diversity, as well as bringing other substantial benefits to the UK in terms of Treasury revenues, jobs and the development and export of new technologies and skills.

Note to Editors

1. The UK Offshore Operators Association is the representative body for the UK offshore oil and gas industry. Its 32 members are licensed by the British Government to explore for and produce oil and gas in UK waters.

2. Since the first developments in the 1960s, the UK oil and gas sector has invested some £200 billion and contributed around £175 billion in tax revenues. It has accounted for 18 percent of the total UK industrial investment over the past decade. It currently supports around 270,000 jobs.

3. There are currently over 220 oil and gas fields in production, producing on average 4.3 million barrels of oil equivalent (boe) per day.

4. Current projections suggest that the UK will be a net importer of oil from around 2008/2010 and gas from 2005/6.

5. PILOT is the successor body to the Oil and Gas Industry Task Force (OGITF) and was established in January 2000 to ensure the OGITF deliverables and vision are achieved. PILOT is made up of twenty-three key Government representatives and recognised leaders from the industry and meets on a quarterly basis. The strategy is for 10 years of Industry/ Government co-operation aimed at achieving the following vision in the year 2010.

* To maintain oil and gas production at 3million boe per day

* To sustain investment at £3bn per annum

* To prolong UK self sufficiency in oil & gas

* To preserve up to more than 100,000 more jobs than there otherwise would have been

* To secure a 50% increase in exports (by 2005)

6. A barrel of oil equivalent (boe) measures the energy content of fuels as if it were all oil.

For more information, please call 020 7802 2400.