Britain at an energy crossroads

Kurt Abraham, Editor-in-Chief 

Effectively, a number of days have passed by, and SPE Offshore Europe (OE) in Aberdeen (Fig. 1) is now a set of recollections. However, what to make of what was seen and heard in the course of the four-day convention and exhibition? There have been many alternative viewpoints, and, actually, many contradictions and hypocrisies.

First, a phrase in regards to the present, itself. When final held in 2023, OE attracted roughly 30,000 attendees, and there have been nice hopes that this determine could be exceeded this yr, to maybe as a lot as 35,000. As a substitute, there was nice disappointment when occasion organizer Reed Exhibitions introduced on late Friday, after the present ended, that attendance was solely 25,000. That’s not solely a failure to develop the present, it’s additionally a 17% discount from two years in the past, when OE was held for the primary time for the reason that Covid pandemic. It’s additionally a far cry from the report OE attendance of 63,000 in 2013.

SPE officers appeared to be doing their finest to place a optimistic spin on this yr’s OE, however the unhappy reality is that the lower in foot site visitors needs to be disappointing and of nice concern. Accordingly, it’s no shock that SPE has introduced that OE in 2027 shall be decreased to a three-day occasion from this yr’s four-day format. In distinction, current phrase out of Stavanger is that OE’s alternating counterpart, ONS (Offshore Northern Seas), is already nearing a sell-out of exhibition area and is anticipating 60,000 to 70,000 attendees. So, what’s making the distinction? Learn additional down for what this editor thinks may very well be a key distinction.

Present ground impressions. In the meantime, OE, itself, was well-executed, and the more-than-400 exhibiting firms did an excellent job in representing their numerous specialties and product choices. From this editor’s perspective, it appeared like offshore wind was a bit muted from its prominence in 2023. In distinction, there appeared to be a considerably larger emphasis on conventional oil and gasoline expertise, together with tie-ins to CCS and Internet Zero operations. This, little doubt, was a welcome side to native and regional officers, who seem like dismayed by the nationwide authorities’s attitudes on vitality and the North Sea specifically. Convention proceedings attended by this editor had been largely informative and coated cross-section of present upstream expertise points.

Political influence. Underlying every thing that went on at OE was the political scenario within the UK with regard to vitality. One simply can’t keep away from it creeping into most conversations amongst business professionals. The scenario principally boils right down to a nationwide administration that appears fairly hostile to grease and gasoline, notably to upstream operations within the UK North Sea. The administration of Prime Minister Kier Starmer continues to retain the surcharge levy on North Sea oil and gasoline manufacturing, even when many different international locations have eradicated related taxation. One can solely assume that Starmer’s individuals are determined for the income to prop up the nationwide price range. However they’re killing off the previous golden goose for short-term achieve. 

Fig. 2. Conservative Social gathering Chief Kemi Badenoch. Picture: Official portrait.

As well as, the Starmer administration continues to implement a ban on granting new exploration licenses. So, operators haven’t any alternative to drill exploration wells from new tracts, the place they could strike a number of average discoveries. And allow us to not overlook the pretty stringent working guidelines for current manufacturing. Taken in whole, the UK’s North Sea regulatory setting is an excessive disincentive to extra funding. The recurrently physique for the area is the North Sea Transition Authority (NSTA). Maybe they need to change the title to NTDA, for North Sea Dying Authority, as a result of that’s the place they’re headed.

Recognizing this actuality, it’s no surprise that Conservative Social gathering Chief Kemi Badenoch (Fig. 2) entered the OE plenary on Sept. 2 along with her hair on hearth, figuratively talking. She constructed her case for larger North Sea improvement (and never much less) by noting that “oil and gasoline nonetheless account for three-quarters of UK vitality wants.” Moreover, stated Badenoch, Norway had its greatest discovery in 10 years, “whereas we’re leaving our assets untouched. We’re sabotaging ourselves and had the bottom oil manufacturing in [nearly 50 years]. We’ve acquired to get that oil and gasoline out of the bottom.”

And that, of us, illustrates the principle distinction between the Labour authorities and the Conservative opposition. One needs to inhibit improvement in favor of infinite windmills, whereas the opposite favors utilizing extra of the confirmed oil and gasoline expertise to fulfill Britain’s vitality wants. This additionally circles again to the lament earlier talked about—that OE attendance was not solely up, it was down noticeably. And I’d dare say that a lot of that decline may be traced to the present Starmer regime’s vitality coverage.

Against this, the outlook for subsequent yr’s ONS present in Stavanger is shiny, as a result of the federal government in Oslo is wise sufficient to pursue a dual-track vitality technique—preserve oil and gasoline improvement sturdy whereas additionally increase different energies. In different phrases, an “all the above” coverage. What a distinction between Oslo and London. In the meantime, the oldsters in Aberdeen are struggling economically.