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Despite the fact that production in the North Sea is declining rapidly and the current government claims to be the greenest ever; the UK oil and gas industry is set to receive record high investments in 2013.
The trade body Oil & Gas UK has stated that renewed commitment by the government, mostly in the form of new tax allowances granted by Chancellor of the Exchequer George Osborne, has helped to boost expect investment for 2013 to £13.5 billion, up a massive £6 billion since 2012.
Related article: UK Reduces Energy Consumption by 25% by Raising Prices by 28%
Malcolm Webb, the chief executive officer of Oil & Gas UK, said that “the recent sharpening of focus within government and industry on the business environment required to grow [the sector's] contribution in future has given investors the confidence to develop new fields and redevelop older fields, so we are now seeing the highest-ever investment.
This is heightening the business opportunities for the UK's world-renowned supply chain and is boosting employment to 450,000 jobs across Britain.”
The news of this huge increase (almost 50%) in investment will no doubt anger British environmentalists who have begun to protest at the growing support and favour that the government is showing to the fossil fuel industry instead of renewable energy technologies.
As a mentioned earlier, this increase in investment is despite the falling output from the North Sea, which Oil & Gas UK state has fallen by around 30% from 2010 to 2012, to just 1.55 million barrels a day. This year output is expected to fall further, to between 1.4 million and 1.2 million barrels a day.
Related article: David Cameron’s Energy Strategy Faces Tough Challenges
Already this year Friends of the Earth complained after calculating that oil and gas producers in the North Sea were receiving around £1 billion from government allowances, which was allowing them to record record profits, despite the falling production.
In the economic report Mr. Webb stated that “the offshore oil and gas industry generates almost £40 billion a year for the economy by producing oil and gas worth £32 billion and by exporting oilfield technology and expertise worth £7 billion.” Taxes on production amounted to nearly £ 7 billion, with oil and gas supply services adding an extra £5 billion, boosting the total tax revenues earned by the government to £12 billion.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…