Sustainability Strategy Commitments

UKOOA Sustainability Strategy 2002 - First Report 5. Key Processes Supporting the Delivery of our Contribution to Sustainable Development   Commitment No. 61 - Upstream industry - government partnership The Oil and Gas Industry Task Force (OGITF) Report A Template for Change set out a vision for the industry for 2010 and some long term aspirational goals to guide industry and government efforts.  We remain committed to the partnership with government initiated by OGITF and continued through PILOT, and to the realisation of OGITF's long-term goals developing this strategy was one of them. Progress to date : achievements and difficulties encountered The OGITF Report in September 1999 concluded that "The future of the oil and gas industry depends upon a good understanding of its strengths and the adoption of business attitudes and strategies that capitalise on them.  The aim of the Task Force has been to make this a practical reality.  The prizes in 2010 are: investment sustained at £3 billion per annum in UKCS activity; production of three million barrels of oil equivalent per day; prolonged self sufficiency in oil and gas; a 50% increase in exports of oil and gas supplies and products; £1 billion additional value from new businesses; supporting up to 100,000 jobs than there would otherwise have been; all leading to a better future for UK plc, the oil companies, contractors, suppliers and employees." The 50% increase in exports has since become a goal for 2005, as well as: investment of £3 billion per annum (rolling average),  and production of 4 million barrels of oil equivalent (boe) per day. One of the major pieces of work undertaken in 2001 and concluded early in 2002, under PILOT, was titled Progressing Partnership, the aims of which are to simplify and standardise many legal and commercial processes, in non-competitive areas of activity, and thereby remove barriers which have hindered progress in the development of oil and gas reserves.  This is particularly important in this mature phase of production from the UKCS, with the sizes of new fields becoming ever smaller and the technical challenges ever larger.  For more details, see Commitment No.63 The oil and gas industry continues to be committed to working with government through PILOT.  In 2001, UKCS oil and gas production of 4.3 million boe per day and investment of nearly £4 billion (comprising exploration and appraisal drilling and development expenditures) demonstrated the industry's commitment fully. However, the recent tax changes introduced in the 2002 Budget, about which there was no consultation or communication in spite of this close working relationship, has dented confidence, introduced unnecessary uncertainty and made the achievement of the PILOT vision significantly more difficult.  The cost to the industry has been estimated by Aberdeen University Department of Petroleum Economics at £7.6 billion, from 2002 to 2010, which will result in less funds being available for investment, thereby leading to fewer jobs, less recovery of oil and gas reserves and a shorter life for the UKCS. Further information about PILOT is available on www.pilottaskforce.co.uk See also UKOOA's Economic Report for 2001, published in March 2002. Next commitment [62. Stakeholder engagement] Previous commitment [60. Annual integrated reporting on sustainability issues] Commitment listing

Sustainability Strategy Commitments