The Oil and Gas Authority (OGA) has been awarded a £5 million ($6.75 M) UK government fund for 2018/19 to survey under-explored areas of the UK Continental Shelf to find potential new deposits.
The Chancellor of the Exchequer and head of Her Majesty’s Treasury, Philip Hammond, announced the fund award on Monday, September 25, during a visit to Aberdeen and Dundee.
The announcement came on the same day that the Oil & Gas Technology Centre in Aberdeen, which the Chancellor visited and is part-funded by the UK government, said its work with industry on new subsea technologies could help unlock 400 million additional barrels of oil and gas from the North Sea and £3 billion of additional value to the industry.
Chancellor Hammond said: “The £5 million funding I am announcing will help exploration to find potential new deposits, and boost prospects for jobs in Aberdeen and the surrounding area. This continues the UK government’s extensive package of tax and funding support for the industry and the wider Scottish economy.
“I’ve seen today how Dundee has benefited from our life sciences and creative sector funding. I now look forward to progress being made on the Tay Cities Deal, which will follow the £1 billion already committed by the UK to Scotland’s City Deals so far.”
UK Energy Minister, Richard Harrington, added: “North Sea oil will continue to fuel growth and jobs across Scotland and the rest of the UK, with an estimated 10-20 billion barrels still remaining.
“The sector continues to have the full support of the UK government, confidence is returning, and today’s announcement recognizes there are great opportunities for further exploration.”
During his visit to Aberdeen, Hammond met oil and gas industry representatives to discuss how the £5 million funding could help employment and the economy in the region. The UK government gave substantial support to the oil and gas sector, including a £1.3 billion package of tax cuts in 2015’s budget and a further £1 billion package in the budget the following year.
The government says UK internal market is the most important for Scotland’s economy. Scotland sells four times as much to the rest of the UK as it does to the entire EU and the UK is currently working to protect the benefits of this market as it prepares to leave the EU.
The UK government is also backing plans to establish Aberdeen as a global leader in decommissioning, creating skilled jobs and exporting this advanced knowledge to other countries.
The government also put in place tax relief for decommissioning which covers around 40 percent of the total cost for UK companies. The decom business is forecast to be worth around £24 billion between now and the 2050s.
In a separate announcement, OGA has welcomed the government’s further support for exploration on the UKCS.
Andy Samuel, OGA chief executive said: “The OGA team are delighted to use this funding to provide industry with a range of high quality new data. This will significantly help address exploration risks and uncertainties and promote frontier and under-explored areas.
“Oil and gas continues to be a vital contributor to the UK economy and energy security, and there has been tremendous progress over the past two years, despite the low oil price environment.
“We have seen how targeted intervention can have a disproportionately positive effect – for example the first round of seismic funding for the OGA opened up frontier areas for the 29th Offshore Licensing Round, where we awarded 25 licenses to 17 companies.”
Offshore Energy Today Staff