Contribution to the UK Economy

Oil and Gas Production

The UK continues to produce very large volumes of oil and gas from its continental shelf (UKCS). During 2006, some 1.1 billion barrels of oil equivalent¹ (boe) were recovered, making a total of just over 36 billion boe over the last forty years. These volumes satisfied the vast majority of domestic demand. In the case of oil, production contributed 588 million barrels (i.e. 96%) of the 615 million barrels consumed. For gas, 80 billion cubic metres (bcm) were produced, or 92% of the 87 bcm consumed; the remainder was met by imports.

Figure 1: Oil and Gas Production 1970-2006

In world terms, the UK remains the 4th largest gas producer and is now ranked 15th largest oil producer. For combined oil and gas production, the UK is ranked 12th, making it more significant than Nigeria, Kuwait or Indonesia.

Figure 2: Major Oil and Gas Producing Countries 2005

The significance of indigenous oil and gas is most obvious in the context of the UK’s total energy picture. In 2006, 70% of all energy consumed was accounted for by oil or gas produced from the UKCS, with the contributions of nuclear power, domestic coal and renewable sources each being in single percentage figures.

The fact that demand for oil and gas is forecast to increase in future highlights the importance of sustaining domestic production, with any that is not so produced having to be imported. In addition, if recovery of reserves from the UKCS is not maximised, the notable benefits to the economy, through high value adding employment, the continued support and growth of the supply chain and the payment of taxes, would be reduced.

¹ “Barrel of oil equivalent” (boe) equates gas volumes with oil, so that a single measure can be made of the two in combination. Back