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Oil and gas body evolution a sign of changing industry
A wind farm on the North Sea. Oil and gas majors are diversifying to renewables on an ever-greater scale
COP26

Oil and gas body evolution a sign of changing industry 

Last year’s Cop26 summit firmly placed the spotlight on the energy needs of Scotland, the UK and the rest of the world, as nations step up their aims to reach net zero carbon emissions. It is widely recognised that a mixture of technologies will be needed to produce cleaner energy and that further investment in renewables is required.

The offshore oil and gas industry is well aware of its central role in this transition to green energy. Operators and companies in the supply chain are diversifying and putting great effort into research and development to meet the needs of the changing landscape.

In the north east of Scotland, which has, of course, traditionally been a centre of expertise for the global oil and gas industry, changes can already be seen. In summer 2021 the OGTC (Oil and Gas Technology Centre), was renamed the Net Zero Technology Centre (NZTC) to better reflect how it will help the oil and gas industry on its journey to produce cleaner energies. Oil and gas majors are diversifying to renewables on an ever-greater scale, publicising their emissions reduction targets and adapting their brands to fit their new missions.

TO REPRESENT its members across oil and gas, hydrogen, carbon capture and storage and floating offshore wind, industry trade body OGUK (previously Oil & Gas UK) is also formally extending its scope this year and as a result changing its name to Offshore Energies UK (OEUK).

OEUK chief executive officer Deirdre Michie says: “Our members are changing and investing in the production of cleaner energy, boosting the technologies and solutions that will be needed for not only the offshore oil and gas sector, but to help the UK economy as a whole. Following an extensive strategic review, we recognised that we need to evolve to reflect what is happening in our sector and with our members, so that we can help drive towards a net-zero energy future.

“This is a natural next step for our organisation, which builds on our heritage, proudly championing the UK’s oil and gas industry as we put these skills and expertise to work to create new opportunities as part of an evolving integrated energy mix.

“Extending our representation to include renewable and carbon cutting industries will better reflect the agile nature of the companies involved in energy production.

According to Michie, the scope extension review has been a year-long process and she says the industry overall has been adapting for quite some time. She adds that the organisation’s members have been involved every step of the way, supporting its proposal to extend its remit last December at its AGM. “The energy mix is adapting to help address the challenges of climate change and it’s important that we continue to change too,” says Michie.

OEUK WILL CONTINUE to represent the oil and gas industry, while taking the needs of other businesses into account that focus more – or entirely – on carbon capture and storage, hydrogen and offshore wind. “This is a significant next step for us as we seek to broaden our offer to all our members while also building on our strengths as champions of an internationally-renowned offshore energy sector that is built on oil and gas,” says Michie. “On the ground, this strategy will see us present a united voice for the changing offshore energy sector. From our member[1]owned workgroups to policy development, we will serve as a platform which brings people together to find solutions and realise opportunities.

“We will continue to work with regulators, governments, politicians and wider stakeholders to champion this industry and help to deliver a managed transition towards net zero – something that we’ve actively been doing already for carbon capture and hydrogen through the ground-breaking North Sea Transition Deal.”

But Michie and OEUK members are conscious of the fact that some of the public, green activists, fund managers, politicians and others want to see more done if they are to be convinced that the oil and gas industry is genuinely committed to the transition. “Judge us by our actions,” she says. “This is a demanding journey that we are all on and committed to seeing through. We are moving quickly and we need everyone to work with us, governments, regulators, the media and the public as we rise to these challenges.”

Michie believes people realise that oil and gas companies are the same ones that have been using their expertise, skill, infrastructure and funds to boost wind, wave, and solar while adopting pioneering new ways to decarbonise their oil and gas operations.

“We will still proudly be making the case for the UK’s offshore oil and gas industry and the role it has to play in getting the UK to net zero while supporting jobs, the economy and our energy security,” she adds.

WHILE SHE SAYS the oil and gas industry has faced some criticism as the UK seeks to cut its carbon emissions, she argues that its businesses are working hard to change from within by diversifying energy sources and creating a broader, cleaner, and more affordable energy mix – an evolution that is reflected by the changes OEUK is implementing. “Oil and gas companies aren’t just paying lip service to green issues; they are putting their money where their mouth is,” she says.

Michie gives the 17 ScotWind projects as a recent example, where OGUK member companies are involved in 13 of them. They will pay more than £570 million in leasing fees that will be put towards public spending to build offshore wind farms and develop more than 20GW in potential capacity. It is not just OGUK operators; a number of existing OGUK supply chain companies are also involved, with Worley, DNV, Xodus and more supporting the ScotWind developments as project partners.

She says members are increasingly involved in green tech and renewables – hydrogen, carbon capture and tidal to name a few.

These involvements are coming to life in the form of low carbon projects up and down the country, such as Acorn Hydrogen & CCS, Equinor’s renewables in Dogger Bank, West Anglesey Tidal Energy Project, Hywind Scotland, Drax Zero Carbon Humber Projects, OGCI Climate Investments and Net Zero Teesside.

“Our changing oil and gas community needs everyone’s positive support, as they are key to ensuring Scotland’s cleaner energy future,” concludes Michie.

The energy mix is adapting to help address the challenges of climate change and it’s important that we continue to change too

Deirdre Michie

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