The UK’s oil and gas sector had a unique role to play in the energy transition but commercial opportunities also had to be created, said members of an industry task force.
Director with the Oil and Gas Authority (OGA) Stuart Payne and Petrofac COO John Pearson set out their ideas on how the industry could progress towards net zero.
Both are members of the industry’s supply chain and exports task force comprised of governmental and independent bodies established in May 2020.
Its short-term aim was to look at the then immediate issue of how to respond to the impact of the pandemic. The medium-term target is to stimulate activity and diversification which could involve potentially $900 billion global projects.
The task force’s long-term goal will be to prepare the oil and gas supply chain for net zero and includes the global underwater hub affecting some 45,000 subsea engineering jobs.
Mr Pearson said that the amount of transferable skills in oil and gas was huge and covered areas such as construction, design, operations, finance and governance but he warned that the UK needed to demonstrate its abilities.
“We’re remarkable joined up these days between government and industry at all the levels, we’ve got a very mature sensible base, and we can get connected to maximise the opportunity in the UK for the UK supply chain which then is a phenomenal platform to export.
“It’s really hard to export if you haven’t done it in your own ‘home market’, if you haven’t got a track record.
“And it’s not lost on the Government that their ambitions will remain that – ie ambitions – if they can’t create commercial realities, take that ambition to something that actually sequestrates or limits or abates carbon in some fashion.
“So this is very real, and it’s coming at us like a train. There’s been so much change in the last two years.”
Stimulating activity, prompt payments by operators, sustaining the supply chain for future generations, and transferring skills to new technologies were also areas which industry needed to address.
“I’m genuinely really positive about the medium term,” added Mr Pearson. “But ultimately what companies need [in order] to survive, to keep people employed and to get them through into the next stage is activity.
“We can have all the bells and whistles around the outside but if there isn’t activity, companies aren’t profitable, shareholders take their money elsewhere, jobs evaporate and skills are potentially lost.”
OGA is calling for a trial period of 80% payment within 30 days, although Mr Pearson added that payment demands should also be balanced with the recognition that operators were also stretched.
Mr Payne added that the UK had helped build the oil and gas infrastructure around the world and could have an equally large role to pay in the energy transition.
“We have a unique role in that we can support Government in achieving their goals of net zero but also help industry and consumers who also have a challenge of getting to net zero themselves.”