The United Kingdom Onshore Operators Group (UKOOG), the onshore oil and gas industry’s representative body, has welcomed the introduction of a new fiscal regime for the onshore oil and gas sector.
The fact that the incentives outlined have an impact only when the industry starts making profits is a vital signal to the sector and potential investors that the UK is serious about onshore oil and gas extraction.
The creation of a strong, safe and environmentally sensitive onshore oil and gas industry will have many benefits for the UK including job creation, tax revenues, direct community benefits and the reduction of dependency on imports, which will reduce price volatility and enhance energy security.
Ken Cronin, Chief Executive, UKOOG said “To build a strong industry which can contribute to the UK economy, the country needs the correct framework for operators, and that includes a clear signal that an appropriate and fair tax regime is in place that will incentivise the long term nature of investments. The Chancellor’s initiatives should be welcomed as they give that strong signal.”
UKOOG is the representative body for the UK onshore oil and gas industry including exploration, production and storage.
The organisation’s objectives are to enhance the profile of the onshore industry, promote better and more open dialogue with key stakeholders, deliver industry-wide initiatives and programmes and to ensure standards in safety, the environment and operations are maintained to the highest possible level. Membership is open to all companies active in the onshore industry including those involved in the supply chain.
History of Onshore Oil and Gas in the UK
The onshore gas and oil industry has been around for more than 150 years after the first indigenous supply came from the production of oil from shale in 1851 in Scotland’s Central Belt, which later reached a peak of 6,000 barrels of oil per day.
Wells drilled in 1895 at Heathfield in Sussex, to provide water for a hotel and railway station, also encountered gas becoming the first natural gas well in the UK, with production of 1000 cubic feet per day.
Today there have been some 2000 wells drilled in the UK, producing over 20,000 barrels of oil equivalent per day.
10% of existing wells have been hydraulically fractured in the UK with the first some 50 years ago.