British energy group calls for more support for the sector amid dwindling investments and steep job losses. File Photo by Stephen Shaver/UPI | License Photo
LONDON, Sept. 27 (UPI) -- Oil and gas exploration activity off the British coast is at a record low and the government needs to step in with its full weight, an industry body said.
"The British continental shelf is in urgent need of fresh investment to boost exploration and drive activity," Deirdre Michie, chief executive of industry body Oil & Gas U.K., said in a statement.
Michie's group said the British oil and gas industry has been resilient in the era of lower crude oil prices. Costs have declined by up to 50 percent, while output since 2014 has increased 10 percent. Nevertheless, the industry has seen steep losses in revenue and more than 100,000 jobs have been lost since 2014.
The industry body said companies have started to grow accustomed to a market where crude oil is trading in the upper $40-per-barrel range, but the British decision in June to leave the European Union is something of a distraction for an economic sector that depends in part on external markets for success.
Michie's group in February said that, with spending on new projects in 2016 expected to move far below the level from five years ago, there were few prospects for legacy momentum in the North Sea and elsewhere in the British energy sector.
Total spending in the British energy sector is expected to drop more than 10 percent from last year to around $25 billion. With the Scottish government looking to keep its energy sector tied closely to Europe, Michie said unified support was imperative for continued momentum.
"I am calling on governments today to vigorously champion the U.K.'s oil and gas industry, by providing certainty in our fiscal regime, encouraging new entrants to the market and recognizing our supply chain as vitally important to the economy," she said.
The British government in August reported total production of all energy reserves increased 4.4 percent from the first quarter of 2015. Total imports of energy products declined 8.8 percent during the same period.