The UK Government has launched a study to investigate how the UK’s top oil and gas firms can develop Britain’s shale gas potential.
Westminster renewed its push to promote controversial “fracking” yesterday, as French energy giant Total confirmed it was investing in the industry in the UK.
Prime Minister David Cameron announced that local authorities in England would receive 100% of the business rates collected from shale gas schemes, rather than the usual 50%.
It is the latest move by the government to promote the exploitation of unconventional gas in the UK, which the prime minister claimed could bring the UK 74,000 jobs, more than £3billion of investment and cheaper and more secure energy.
But environmentalists criticised the business rates incentive as a “bribe” to reluctant local authorities.
Yesterday, the United Kingdom Onshore Operators Group (UKOOG), the onshore oil and gas industry’s representative body, announced the launch of a major supply chain and skills study to understand the needs of industry as it enters the next phase of its development.
This study, which will build on work undertaken by individual onshore oil and gas operators at a regional level, will be conducted by EY (formerly Ernst & Young), the professional services firm, and funded by the Department of Business Skills & Innovation (BIS) and UKOOG.
The EY study will identify what the industry requires in terms of skills, materials and equipment to construct and operate a single pad site in production and will include all associated requirements such as water treatment facilities, transport requirements and rigs.
This work will inform a detailed inventory. It will also look at the nature of jobs that could be created – both directly in engineering, geology associated technical services, IT, construction and transport, as well as indirectly. This work will be used to assess what can be supplied by UK firms to an emerging UK shale gas industry. Wood Group PSN already carries out extensive shale work in the US.
Chris Lewis, EY partner, said: “EY hopes that the report will prove to be a crucial step in realising the opportunities associated with the burgeoning onshore sector. Engaging with suppliers and operators and assessing their capabilities and requirements will help UKOOG map out a development path that demonstrates how value can be maximised for the benefit of the wider UK economy.”
Business and Energy Minister Michael Fallon said: “The government is encouraging safe exploration for shale gas to go ahead as quickly as possible. It has huge potential to contribute to economic growth and provide another source of home-grown energy over the coming decades. We want to ensure that the UK is ready to grow its supply chain and develop the necessary skills so that local communities benefit from jobs and investment.
“This study, which we are part-funding, will establish the UK’s capability and help support the ongoing work of the oil and gas industrial strategy to create new jobs, encourage investment and increase exports.”