Contribution to the UK Economy

Capital Investment, Gross Value Added and Expenditure

Oil and gas companies play a key role in UK investment activity. In 2004 the UK oil and gas industry contributed a fifth of the capital expenditure invested by all production and manufacturing industries.

The UK’s offshore oil and gas industry also continues to create more wealth than any other production or manufacturing industry. In 2004, the latest year available, the oil and gas industry contributed 13% of the gross value added (GVA) of all UK production and manufacturing industries. At £27 billion, the GVA of the oil and gas industry accounted for 2.6% of the total GVA for the UK in 2005.

While oil and gas production itself makes a very important contribution to the UK’s wealth generation, investment and expenditure through the supply chain also made valuable impact, adding a further £12 billion in GVA to the UK economy. The supply chain also provides goods and services for export, supporting the global oil and gas economy as well as a much wider range of related industries which further boosts UK GVA and exports.

Figure 5: UK Oil and Gas Industry Investment & GVA 2004

Since 1970, the upstream oil and gas industry has spent nearly £350 billion exploring for and recovering reserves from the UKCS, comprising £50 billion on exploration, £177 billion on development of oil and gas fields, including offshore and onshore infrastructure, and a further £120 billion to operate these assets.

Figure 6: UK North Sea Expenditure 1970-2005