But why didn’t we know that?

By Malcolm Webb, Chief Executive Oil & Gas UK

It had been an enjoyable supper with new acquaintances. The question came at coffee: “So, Malcolm, what do you do for a living?” “Well”, I replied, “I work for the UK oil and gas industry.”

The retort quickly came back, “But we import all our gas from Russia these days, renewable energy is replacing oil and UK engineering is just history. So what do you do on the other six days of the week?”

“Ah, but you see”, I said, “the truth is rather different.”

I went on to explain.

The UK oil and gas industry is a central pillar of our economy, investing more than any other (31 per cent of the total), paying more tax than any other (30 per cent of all corporation tax last year) and employing 450,000 people across the UK in high quality jobs enjoying average earnings of £50,000 per annum.
Today coal, nuclear and renewables together meet only about one quarter of Britain’s total primary energy needs. The other three quarters of the energy which we need to fuel our cars, trucks and buses, provide heat, light and power to our homes, offices, hospitals and schools and generally provide the power for modern living, relies on oil and gas. Luckily for us today, UK production meets almost all our need for oil and 70 per cent of our gas. Furthermore, despite what some say, currently we import almost no gas from Russia and our imports come mostly from Norway.

Assuming the government meets all of its targets for renewable energy, 70 per cent of our primary energy supply in 2020 will still come from oil and gas. We may have so far produced 38 billion barrels of UK oil and gas but we could have up to 25 billion barrels left to come and still be producing 40 per cent of the UK’s total daily needs in 2020.
If UK engineering is regarded externally as a spent force, our industry defies the trend. Its supply chain is a global centre of engineering excellence and undisputed world leader in high tech subsea expertise. In 2008 British contractors together earned £5 billion for the UK in exporting oilfield goods and services. As I paused, the response came back from all around the table: “But why didn’t we know that?” That is a very good question and one which I find worrying. Worrying, because in my experience the great majority of people seem to be unaware of these facts.

Which begs the question why should that be so? Is it because most of our operations take place at sea and over the horizon, literally “out of sight and out of mind”? Could it be that the UK’s oil and gas reserves are of no particular interest to the average person? Or is it that the oil and gas industry is generally an introspective one, reluctant to proclaim its important role and undeniable successes?

Whatever the reason, there does seem to be a serious lack of knowledge on the part of the general public about this great UK industry. I am prepared to wager that if you asked a random selection of the shoppers in any British shopping centre (bar in Aberdeen), only a small handful would know that this country is still a significant oil and gas producer and has the ability to remain so for decades yet to come.

How many would know about our global reputation for excellence in offshore and subsea engineering? And here I believe lies a real danger for our industry; the danger of political irrelevance which can come when an industry slips out of public consciousness.

At Oil & Gas UK we are working hard to try and turn this situation around but we do not pretend that we have all the answers – or that we can do this alone. There is a role for everyone here and I would be very interested to hear what more you think could be done to communicate better the importance and relevance of this industry to the public at large.

If you wish to contact me on this issue, please do so on mwebb@oilandgasuk.co.uk

Published: 31st March 2010