Future gas and oil investment may hit £100bn

Increased capital investment in the oil and gas industries could benefit the North East economy, but we must move quickly says sector boss Dennis Clark.

Speaking to hundreds of delegates at the NOF Energy National Conference in Gateshead, Mr Clark, OBE, pointed to significant positive development in the UK gas and oil industries.

Mr Clark, chairman of offshore oil and gas company OGN Group, described how capital investment has risen year on year since 2003, and is forecast to hit £100bn by 2013-14.

New tax concessions and improvements in technology are said to be behind this dramatic increase.

Mr Clark said: “George Osborne has played his part and the coalition government has woken up to the fact that tax hits are counter productive.

“You can see more today with new technology that you could five years ago.

“We can locate oil and gas reservoirs that in the past were invisible or too hard to reach.”

These new developments means that drilling can be carried out with pin-point accuracy and the lifespan of oil and gas fields can be increased.

Mr Clark, a fellow of the Energy Institute and Director of Oil and Gas UK, used Forties Oil Field in the North Sea off Scotland as an example of increased opportunities in the industry.

He said: “Work started at Forties Field in 1975 and by 2002 it had produced 2.5m barrels.

“Apache bought the site in 2003, it was due for decommission in 2012.

“120 development wells were discovered and drilled, five new seismic surveys were carried out and a sixth is planned for 2013.

“The site’s decommission has been deferred indefinitely and the site is currently producing 50,000 barrels a day.

“This is an example of the application of improving technology and experience.”

Mr Clark told the audience that despite the growing opportunities in the North Sea, UK businesses are losing out to overseas companies.

He described how 95% of projects go to places outside of the UK, representing 18,000 jobs which have been placed with foreign companies.

Mr Clark, honorary president of NOF, is campaigning the government to promote UK content, as currently the UK is the only gas and oil province without a policy to favour local content.

He said: “This could be providing growth of existing businesses and increasing employment in the North.

“Training and development opportunities for young people are being lost and highly skilled people are leaving the area.

“There’s no excuse for doing nothing if you want a share of the £100bn.”

Mr Clark was speaking at the conference, entitled ‘Energy a Balanced Future’ which saw members of the energy sector supply chain gather to hear speakers showcase opportunities across oil & gas, nuclear and offshore renewables.