UKOOG to launch supply chain and skills study for onshore oil and gas extraction in the UK
13 January 2014
United Kingdom Onshore Oil and Gas (UKOOG), the onshore oil and gas industry’s representative body, today announces 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 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 then be extrapolated to look at the potential requirements on a UK basis and will provide 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 British businesses now and in the future to an emerging UK shale gas industry.
Chris Lewis, EY partner, commented: “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.
The Institute of Director’s report “Getting Shale Gas Working” identified in their mid-case scenario the potential for 74,000 jobs being created in the industry, peak investment of £3.7bn per year and the potential to reduce gas imports by approximately 50%.
A recent IHS Global Insight study found that unconventional gas activity in the US supports more than 1 million jobs (direct, indirect and induced) currently and is projected to support a total of more than 2.4 million US jobs by 2035.
Ken Cronin, CEO UKOOG, commented “The development of a robust UK onshore oil and gas supply chain will improve the economics of the projects being developed by the oil and gas industry. We have a huge opportunity of creating that supply chain here in the UK, this study is the first plank in ensuring that this happens and that the UK fully benefits from the natural resources below our feet in terms of investment and jobs.”
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 on-going work of the oil and gas industrial strategy to create new jobs, encourage investment and increase exports.”
UKOOG is the representative body for the UK onshore oil and gas industry. The organisation’s objectives are to enhance the profile of the onshore industry, promote better and more open dialogue with key stakeholders, deliver industry-wide initiatives and programmes and to ensure standards in safety, the environment and operations are maintained to the highest possible level. Membership is open to all companies active in the onshore industry including those involved in the supply chain.
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