Energy and Clean Growth Minister Statement on British Natural Gas Industry

Energy and clean growth minister Claire Perry published an article, The future is beneath us, originally in the Sun on Friday 18th May 2018.

In the article, Ms Perry set out the benefits and the role gas will play in the UK’s future and said Government is committed to “support the development of onshore British shale gas and to deliver a clean safe and affordable energy supply for the country”.

The full article can be found – https://www.gov.uk/government/speeches/the-future-is-beneath-us?utm_source=1eafd99e-f777-4d58-9048-473afabe8802&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Government announces two big investments in the future of energy technology

Minister of State for Universities, Science, Research and Innovation Sam Gyimah has published an article in the Huff Post, Securing Britain’s Energy Future After Brexit. Mr Gyimah announced Government has opened the headquarters of the Faraday Institution at Harwell campus in Oxfordshire and it has launched the EnergyTec Cluster to develop the next generation of green technologies.

Mr Gyimah hopes the UK will become a leader in battery technology and said, “New developments in batteries are essential to making clean economic growth a reality: they allow us to store renewable energy created from renewable sources, and allow us to make better, cheaper low-emission vehicles.”

Read the full article at https://www.huffingtonpost.co.uk/entry/britain-energy_uk_5af2ef9ce4b0a0d601e8b09e.

Shell publishes Energy Transition Report

Royal Dutch Shell has published its Energy Transition Report outlining how its strategy should enable it to thrive as the world transitions to lower-carbon energy. This includes growing its business in areas important to the energy transition, including hydrogen and offshore wind.

The report sets out that Shell will continue its work in the oil and gas sector, while evolving to changes in demand and the energy system. It expects to produce around 80% of its oil and gas reserves by 2030, after that it expects only 20% production. Read the full report: www.shell.com/energytransitionreport.

UK Energy Report, 22nd – 29th March 2018

Find below a snippet of this week’s UK Energy Report, the full report can be viewed here.

IN THE NEWS THIS WEEK

  • Global demand for energy up over 2% last year
  • ON and RWE scrap plans to merge
  • Earth Hour
  • Opec and Russia discuss extending alliance

The UK Government’s short-termist energy “policy” has been criticised by E.On’s Chief Executive saying “Policy and business have to be in line; there has to be an implicit partnership, or an explicit partnership”. This is one of the founding principles behind UK Energy Strategies. We believe the Government should set out a 40-year energy strategy in collaboration with the energy industry and other key stakeholders. We are working with industry leaders and Government to achieve this step-change in the approach taken by both industry and Government, in the interests of the UK. Government and Industry have a duty to ensure that the UK can heat its homes, keep its lights lit and ensure the UK generates as much of its energy as possible, reducing its reliance on imports and therefore the risk that entails, whilst meeting its carbon targets. That clarity over long-term policy is fundamental to secure the investment decisions which the UK needs industry to take.

If you are not already engaged with us, or you would like to find out more about how you can help to forge and influence a partnership between ‘policy and business’ (or Government and Industry), please contact cara.meadows-smith@ukenergystrategies.com.

Briefing on Key Stakeholder Government Departments for the Oil and Gas Sector

Follow the link before for a briefing on the relevant Government officials for the Oil and Gas Sector.

 UKES Key Government Stakeholders for Oil & Gas March 2018

If you or your organisation would like to discuss how to influence Government policy, please contact UKES to arrange an initial meeting. Contact one of our team on 020 7368 3111 or email cara.meadows-smith@ukenergystrategies.com

UK expects to produce 11.7 billion boe before 2050

The UK anticipates producing 11.7 billion barrels of oil equivalent between 2016 and 2050, according to new projections from the UK Oil & Gas Authority (OGA).

The detailed projections can be found inside a new report entitled Projections of UK Oil and Gas Production and Expenditure, which also shows that production from the UK Continental Shelf (UKCS) remained stable at 1.63 million boe/d in 2017 compared to 2016. Growth is expected in 2018 with more fields coming online.

 

 

 

 

More and more companies are currently releasing their 2017 annual results. The major companies to see an increase in UK production between 2016-2017 include Spain’s Repsol (19%) and Chevron (20%), according to data available in Evaluate Energy.

Royal Dutch Shell, France’s Total and BP were among the largest UK producers in 2016 with around 200,000 boe/d, 148,000 boe/d and 113,000 boe/d, respectively1. These companies are all yet to report a full country-by-country breakdown of their European production in 2017, but all have recorded an increase in European production, year-over-year. Both Shell and BP produced more in the UK in 2016 than in any other European country, although Shell did sell a large package of UKCS assets for US$3.8 billion in 2017, which will impact any year-over-year growth in the UK for this company. 37% of Total’s European production in 2016 came from UK fields, second only to neighbouring Norway.

The OGA data also suggests that production from the UKCS will become increasingly oil-weighted in the medium term. Production is projected to fall over time and higher margin products will be the focus. OGA’s current projection for 2023 production is 1.38 million boe/d, 65% of which will be comprised of oil and natural gas liquids. This weighting has increased steadily over the past few years – from a low of 56% in 2006 to just over 60% at the end of 2016, according to data available in Evaluate Energy.

The report from the OGA also states that capital expenditures on the UKCS dropped for the third consecutive year and that both operating costs and decommissioning costs rose marginally in 2017. For more, click here.

Written by Mark Young, a senior analyst with Evaluate Energy. Evaluate Energy is owned by Glacier Media. UK Energy Strategies Ltd. is a joint venture between Glacier Media and Portcullis Public Affairs.

Note

  • Reported natural gas production volumes in cubic feet were converted to boe at the rate of 6 Mcf : 1 bbl to calculate each companies boe/d production volumes.

Change of Ministerial Responsibilities at BEIS

Department for Business, Energy and Industrial Strategy

Change of Ministerial Responsibilities

January 2018

Ministerial responsibilities for the Clean Growth Strategy and for Energy have been brought together in a move which certainly appears logical even though there are clearly risks of delay to established as well as proposed programmes and initiatives. However, this prospect of delay does also represent an opportunity for Industry to come together and prepare itself to make the most of the integration of portfolios.

There remains a compelling case for the clarification of policies needed to secure necessary investment – both short-term and long-term.

Please see below a breakdown of the most relevant Government reshuffle changes.

The Rt Hon Claire Perry, Minister of State for Energy and Clean Growth

Following the reshuffle Ms Perry was promoted to attend cabinet.

The Minister is responsible for:

  • Industrial Strategy
  • carbon budgets
  • international climate change, including International Climate Fund
  • climate science and innovation
  • green finance
  • energy efficiency and heat, including fuel poverty
  • low carbon generation
  • energy retail markets
  • smart meters and smart systems
  • oil and gas, including shale gas
  • security of supply
  • electricity and gas wholesale markets and networks
  • international energy
  • energy security, including resilience and emergency planning

Richard Harrington, Parliamentary Under Secretary of State, Minister for Business and Industry

Responsibilities include:

  • Industrial Strategy
  • Sector Deals
  • aerospace
  • advanced manufacturing
  • materials, including steel
  • automotive
  • nuclear
  • infrastructure and construction
  • professional services
  • rail supply chain
  • defence
  • maritime
  • Pubs Code policy
  • supply chains

No other changes were made to ministerial responsibilities at BEIS.

Conclusion

As the UK prepares to leave the EU there is a strong need for clearer policy signals. Leaving the Single Market, the EU’s Internal Energy Market and Euratom would create greater uncertainty for all stakeholder groups. The Government has a number of challenges in this sector, most notably energy security – which, unless adequate preparations are in place, could lead to outages and/or rapid increases in consumer prices.

So it is vital that Government, with the support of Industry, takes the lead in developing the right energy mix in order to meet both supply and climate targets through 2050 and beyond. UKES is pleased to be able to support this endeavour.

Summary of Statements by Richard Harrington MP as Energy Minister June – September 2017

Since taking up his post in June 2017, the Energy Minister, Richard Harrington has spoken on a range of issues across the energy industry. UKES has compiled the definitive collection of those statements up to September 2017 which is available to download below.

Briefings such as this are regularly produced for UKES’ clients with specific analysis tailored to the particular client’s needs. To find out more about how UKES can help your business succeed in the fast-paced energy sector, please contact us for your free initial consultation.

UKES Summary of Statements, Energy Minister 0617 – 0917