A Revival in Offshore Energy
Despite environmental concerns, the North Sea still plays a crucial role in maintaining energy security and source of supply for this country. This has been underpinned by two recent investments concerning both oil and natural gas. Centrica and GDF Suez have announced that 1.4 billion will be invested in the Cygnus gas field in the southern North Sea, 150 miles off the Lincolnshire coast. 80% of the investment portfolio will awarded to British firms, thereby creating up to 4000 direct and indirect jobs during initial constructiion. The development concept entails at least 4 platforms and ten gas wells for prospecting purposes. The Cygnus field is estimated to contain 18 billion cubic metres of natural gas. At peak production, the field could account for 5% of the UK gas production and provide energy for over a million homes. Both firms took advantage of a new government tax break concerning income generated from production of oil and gas in shallow water production.
Talisman Energy (UK) has also won approval from central government for a 1.6 billion investment package to extend life of several fields in the North Sea such as Brechin and Wood and recover another 100 million barrels of oil. This could sustain or create up to 2000 jobs in Scotland . The firm has also landed consent to expand production at two new fields, Cayley and Shaw. Both projects will help secure future oil and gas production but more importantly cut reliance on energy imports from the Middle East or the Russian Federation.
Like or lumpp it, we have to face the fact that we will still have to generate energy from fossil fuels over the next few decades and renewables cannot be proclaimed as the panacea for everything. There is an argument for promoting natural gas for two reasons. It is a more efficient fuel to burn than coal or oil producing more energy but also creates a lot less carbon dioxide. Therefore there is an environmental benefit too. The government would also help itself by reducing uncertainty over the shape of the market place and passing the much vaunted Energy Bill so that suppliers and producers know where they all stand. This would also encourage construction of new nuclear power plant.
(See www.centrica.com)
Mark Sandford - Permission granted to freely distribute this article for non-commercial purposes if attributed to Mark Sandford, unedited and copieed in full, including this notice.
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