The United Kingdom has seen a tumultuous few weeks. First, the people of England witnessed the appointment of Prime Minister, Liz Truss, after winning the Conservative leadership contest. Just days later, the sovereign state learnt of the passing of Queen Elizabeth II, who was bid an emotional farewell at her State Funeral, which marked the end of her seven-decade-long reign. It is fair to say that the overwhelming feeling across the UK is currently one of uncertainty, which has equally been felt within the upstream oil and gas sector in recent months.
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The UK sector is under mounting pressure to cut ties with Russia and decrease its dependence on imported gas supplies, since the country’s invasion of Ukraine. The UK however is currently only able to meet 48% of its gas demand from domestic supplies;1 in response to this, Offshore Energies UK (OEUK), a trade association for the United Kingdom offshore energies industry, is pressing for ministers to announce further rounds of oil and gas exploration licences, and warns that without new investment, the UK could be set to import around 70% of its oil and 80% of its gas by 2030.2 The new Prime Minister has also declared her commitment to energy security, and is putting plans into place to combat soaring energy bills. Controversially, Truss has confirmed that she will reverse the ban on hydraulic fracturing in the UK – a move that she hopes will “get gas flowing” in as soon as six months.3 While the threat of earth tremors caused by fracking is a concern to some, others believe the practice is one that can be executed quickly and has the potential to reap significant shale gas supplies. Shale gas company, Cuadrilla, whose operations include a hydraulic fracturing site in Lancashire, have stated that 10% of the gas from shale deposits in the county and surrounding areas “could supply 50 years’ worth of current UK gas demand.”4
Regardless of whether or not the reversal of the ban is a positive move, there is no doubt that an increase in domestic oil and gas production is crucial to strengthen energy security in the UK. Some associations in the sector have suggested that this represents an opportunity to push the transition towards cleaner energy solutions and net zero objectives,5 a refreshing and hopeful notion in such uncertain times. This notion is reinforced with the appointment of Wael Sawan as Shell’s Chief Executive Officer, who has promised to “grasp the opportunities presented by the energy transition,”6 pointing to a bright future for the industry. Echoing the words of the late Queen Elizabeth II, such promises must be seen to be believed.