Further detail of support measures for the UK's oil and gas industry were revealed yesterday following a visit by Prime Minister David Cameron to oil city Aberdeen.
Cameron first signed a "UK City Deal" fund of up to £250 million (US$358.4 million) for Aberdeen, which will include an oil and gas innovation centre.
It was also revealed that £20 million of new funding will be provided for a second round of new seismic surveys to unlock new exploration activity on the UK Continental Shelf. The data will be made publicaly available, with £1m allocated to award innovative use of data to unlock new fields.
An Oil and Gas Ambassador will be appointed to help ensure the best possible access for UK companies to markets overseas, promote the North Sea around the world and boost inward investment. We will be ambitious with our expectations, and will set a challenging export target in partnership with the UK oil and gas industry.
The Oil and Gas Authority will publish a UKCS Decommissioning plan by the early summer, aimed at enabling the £15 billion Aberdeen service sector to become the centre of a new global market for decommissioning. This will be supported by the Natural Environment Research Council who are investing up to £1 million in new projects to support the development of expertise in the UK on decommissioning and its environmental management.
Innovate UK is launching an “Energy Game Changer” which will make £1.5 million available for innovators - micro businesses and SMEs from outside the energy sector - to come up with radical solutions and disruptive technologies in response to challenges set by the energy industry. These include challenges set by the oil and gas sector in areas like monitoring corrosion under installation, vessel inspection and use of sensors and data.
The Natural Environment Research Council is allocating an additional £1 million investment in the successful Oil and Gas Centre for Doctoral Training led by Heriot Watt University in Edinburgh and with Aberdeen University as another core partner. This further investment will enable the program to be extended for a further year and take the total number of PhD students funded under this scheme to 120 by 2017.
The newly formed regulator, the Oil and Gas Authority, will also provide £700,000 funding to invest in the development of a 3D visualization facility at the Lyell Centre in Edinburgh.
The UK oil industry's new regulator, the Oil and Gas Authority, also published its Maximizing economic recovery of UK petroleum draft strategy document. It sets out how it, as a regulator, aims to maximize the remaining economic potential in the UK North Sea. The document will be seen as a legally binding document once approved.
The funding for the Lyell Centre will allow the center, a joint venture between the British Geological Survey and Heriot Watt University, to benefit from state of the art equipment to help better interpret complex geological and engineering data. The open access facility will support the dissemination of data and analytical tools to academia and industry alike.
In addition, the facility will be used to derive maximum value from the data obtained by the successful £20 million Government-funded seismic shoot in the Rockall Trough and Mid-North Sea High (MNSH) regions last year.
These "frontier" regions will be the focus of the 29th Offshore Licensing Round which, subject to Strategic Environmental Assessment, will be announced later in the year.
OGA has also committed to awarding up to £500,000 of government funding to support two post doctoral appointments in UK universities, each lasting two years. The appointments, in the fields of geoscience or reservoir engineering, will contribute towards a long-term investment in UK academic skills in energy-related disciplines.
OGA will shortly be launching a competition to define the exploration potential of the Rockall Trough and MNSH areas using the seismic data acquired from the government-funded seismic surveys and additional public domain data. Details of the competition will be made available soon, including entry criteria.
OGA chief executive Andy Samuel said: “The strong commitment from government to support this vital sector during this difficult economic downturn is very welcome. The endorsement of the City Region Deal and Oil and Gas Technology Centre will play an important role in anchoring the area’s future as an oil and gas hub, while the £20 million government support to fund more seismic surveys is a welcome boost to increase exploration.
“The further support being put forward by the OGA isn’t just an investment in the long-term future of the basin, it will also have immediate benefits to exploration. We’re working hard alongside industry to get the best out of the basin and deliver value to the sector.
"Today’s publication of the MER UK Strategy reflects the collaboration between all parties to achieve this. We continue to provide a flexible and pragmatic approach to licensing, and recently published the lessons learned from our rigorous analysis of failed wells to help mitigate the risks of drilling poor prospects in future.”
In addition to these announcements, OGA will continue to work closely with the UK and Scottish Governments and industry to support the oil and gas sector, including supporting UK companies compete for local and global decommissioning opportunities.
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