The UK oil and gas sector is the second largest in Europe and also the UK’s largest industrial sector. There are a number of opportunities for overseas companies and investors.
2. Upstream sector opportunities
The upstream sector consists of the exploration, production and distribution of crude oil and gas products. The sector employs 450,000 people across the UK. Companies include BP, Shell and Marathon.
There’s been over £270 billion of investment in the UK to explore and develop fields since North Sea upstream production began. The upstream sector has developed the use of technologies required for North Sea production.
Investment opportunities in the upstream sector are mainly in maintenance and overhaul projects.
3. Downstream sector opportunities
Downstream consists of the onshore refining, processing, blending and distribution of finished petroleum products. These products are sold in to the sectors which produce:
The sector employs 100,000 people across the UK and companies include ExxonMobil, ConocoPhillips, Ineos and Careless. The major onshore fuel distribution networks are owned by the UK government and by companies such as BP, Shell and Valero.
4. Decommissioning opportunities
As North Sea fields mature, old hardware has built up creating decommissioning requirements.
Government legislation requires that:
- all surface and sub-sea equipment and materials must removed
- wells must be plugged and capped
In addition the following needs to be decommissioned by 2040 and has a value of around £30 billion:
- 475 installations
- 5,000 subsea wells
- 10,000km of pipeline
This means there are new investment opportunities being created in:
- large-scale engineering
- safety management
- well plugging
5. Shale gas opportunities
The British Geological Survey has identified big shale gas deposits, which may mean the UK could be self sufficent for 30 years.
No activity has taken place to extract gas from shale rock yet, known as fracking. There is a plan to have a new round of onshore licensing in 2014 which will mean opportunities for companies and investors.
6. North Sea opportunities
The North Sea is expected to continue producing oil for another 30 to 40 years with potential for another further 25 billion barrels of oil. This means new business opportunities for:
- companies with technologies which can access more challenging oil fields
- decommissioning work worth about £27 billion over the next 10 years
There are different locations across the UK known as Enterprise Zones that offer investors incentives to locate themselves there including:
- reduced taxes
- simpler planning rules
- financial benefits
Many Enterprise Zones have employment clusters, where businesses from the same sector are located in the same zones.
8. Help from government
The UK government is supporting the development of oil and gas as part of the Oil and Gas Industrial Strategy published in March 2013.
9. Contact UKTI for help
UKTI can provide overseas companies and investors with more information about opportunities in the UK’s oil and gas market.
UKTI Investment Services Team
Telephone (from outside the UK): +44 (0)20 7333 5442
Telephone (from inside the UK): 0845 539 0419
Overseas companies can contact the UKTI Investment Services Team for information about setting up in the UK including the help that is available.