The UK has a range of exciting opportunities for international oil and gas businesses - from exploration to innovation.
The UK oil and gas industry has 50 years of experience in exploration and production and is home to over 800 oil and gas companies.
The UK has a focus on technically challenging methods of extraction and production and is an ideal location to undertake research and develop new technologies. From the extraction of oil and gas to innovations in cleaner methods of production, there are a wide range of opportunities in the UK market.
From clean growth to technological development, the UK provides a range of market opportunities for international business.
Businesses within the industry are expanding to take advantage of growing demand and projected growth. Chinese oil and gas giant CNOOC International Limited, began production from the Buzzard Phase II development, utilising the existing Buzzard facility. It also built a set of underwater production systems. Thirty nine wells have also been drilled in the UK in 2021.
The oil and gas sector can benefit from sector-specific design and solution expertise from various businesses. Trant, for example, has operated in the oil and gas industry for over 35 years. It has had repeat business from major oil and chemical companies, both in upstream exploration and downstream refining and oil storage.
International demand for gas is projected to grow from about 4.5 trillion cubic metres in 2020 to a peak of around 5.5 trillion cubic metres in 2041.
By 2045, global demand for oil is expected to rise to 108.2 million barrels per day (bpd), a sizeable increase from the 90.6 million bpd demanded in 2020. Oil and gas companies can capitalise on the UK’s resource endowment and expertise to take advantage of anticipated future global demand.
There are emerging opportunities in the delivery of green gases, such as biogas, biomethane and renewable hydrogen. The government supports these through the Green Gas Support Scheme (GGSS).
The scheme provides financial incentives for new anaerobic digestion biomethane plants to increase the proportion of green gas in the gas grid. Alongside this, the Net Zero Hydrogen Fund will be open to applicants in 2022, assisting the UK’s transition to net zero.
The UK has ambitions to reach net zero greenhouse emissions by 2050, and the oil and gas industry is an important partner in this transformative effort. The research and development conducted by government-backed organisations, such as the Net Zero Technology Centre (NZTC), assist these efforts.
The global demand for oil and gas is projected to [grow into the mid 2040s]. As one of the few nations in Europe that extracts oil and gas on scale, companies can make use of the UK’s years of expertise and innovation.
Key UK assets
Oil and Gas UK (OGUK)
OGUK is the leading representative body for the UK offshore oil and gas industry. They inform, engage and champion the UK offshore oil and gas industry as part of a diverse energy mix.
OGUK’s events and councils offer unique insight and networking opportunities with political figures, senior business leaders, and innovative businesses from every part of the industry.
The UK is home to 3 of the world’s top 10 universities for engineering and was ranked number 4 in the world on the 2021 Global Innovation Index.
The UK has a variety of groups, such as the Institution of Civil Engineers, that facilitate networking between individuals and businesses in the development of technical and practical knowledge.
Natural endowment and exploration
The Oil and Gas Authority’s estimate for proven and probable UK reserves at the end of 2020 is 4.4 billion barrel of oil equivalent (boe). Exploration success in 2020 also delivered an addition of 212 million boe to the total of contingent resources.
Groups, including the Petroleum Exploration Society of Great Britain, champion these efforts.
Global Underwater Hub
The Global Underwater Hub (GUH) is a new strategically focused organisation. Built upon Subsea UK’s near 20-year legacy, it’s expanding its reach, scope and sphere of influence across the UK and the sectors operating in the underwater industry.
UK universities, in partnership with industry, are pioneering the transformation of the energy sector towards net zero through research and development.
The Sustainable Gas Institute (SGI) was created by Imperial College London in partnership with the former BG Group. It provides leadership and interdisciplinary analysis on the role of natural gas, hydrogen and biogas in future low carbon energy systems.
The Net Zero Technology Centre’s (NZTC) Innovation Network manages connections between the British oil and gas industry, scientific institutions, technology centres, and innovators. The NZTC is proactive in identifying possible value add applications for the industry, enhancing the UK’s R&D capability. CATCH, an industry led partnership in Yorkshire and the Humber facilitates collaboration, encouraging knowledge exchange, and by extension innovation.
The UK government is also allocating £11 million to facilitate the use of biogas and hydrogen in distilleries.
Business and government support
The UK government is helping the oil and gas industry explore opportunities in cleaner energy. The North Sea Transition Deal will see investment of between £14 billion to £16 billion by 2030 in new energy technologies. This will be supported by business models, to enable Carbon Capture, Utilisation and Storage (CCUS) and hydrogen at a large scale.
The Hydrogen Strategy lays out the UK’s ambitions to be a global leader in hydrogen technology, and the GGSS. In 2020, the oil and gas industry also received £3.7 billion in investment and can expect a further £21 billion between 2021 and 2026, delivering 2.7 billion boe over time.
Engie is a leading French energy and services company. In 2018, the company entered a partnership with Newcastle City Council to develop and operate district energy schemes within a 40-year period.
The £20 million scheme will provide businesses and homes with affordable energy by applying natural gas fired combined heat and power.
Texas-based company ExxonMobil invested $1 billion in 2019 in its Fawley Refinery. It is the UK’s largest refinery, representing 20% of the UK’s capacity, with a major ongoing investment programme encompassing increased output of ultra-low sulphur diesel.
The company also has plans to support the refinery with a hydrogen gas plant.
Saudi Aramco is set to invest £850 million into its SABIC site in Teesside, creating and protecting 1,000 jobs. This will strengthen site operations and enable the transformation of SABIC’s Olefins 6 cracker, with the first phase reducing carbon footprint by up to 60%.
This will make it one of the world’s lowest carbon-emitting crackers.