Deirdre Michie, CEO of OGUK - North Sea

UK oil & gas industry makes huge progress on North Sea Transition Deal, OGUK says

A review of the oil and gas industry’s progress against the terms of the North Sea Transition Deal (NSTD), conducted by OGUK, has shown strong progress in the first ten months since the landmark deal was signed, with several key milestones already reached.

Deirdre Michie, CEO of OGUK

Oil & Gas UK (OGUK) is a representative body for the country’s offshore oil and gas industry but, following a recent strategic review, the lobby group is expanding to include low-carbon offshore energy technologies. As a result, the group will change its name to Offshore Energies UK, starting from 14 February 2022.

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The NSTD, agreed at the end of March 2021, set out an ambitious plan for how the UK offshore oil and gas sector and the UK Government would work together to deliver the skills, innovation and infrastructure required to meet the UK’s carbon reduction targets. In addition to the sector achieving net-zero by 2050, the deal seeks to safeguard and transition thousands of existing jobs while creating another 40,000 new jobs by 2030, in areas including carbon capture storage (CCS) and hydrogen production.

In an update on Monday, OGUK said that, ten months on from this agreement, both industry and government have made strong progress in a number of areas – from the reduction of carbon emissions from the UK Continental Shelf to the launch of the Methane Action Plan, the selection of two ‘Track 1’ CCS projects in North East and North West of England, and the successful OGA £1m electrification competition.

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Energy & Climate Change Minister, Greg Hands MP, said: “Since agreeing our landmark North Sea Transition Deal we have made great progress towards delivering on its ambitious commitments, helping support and safeguard the sector’s highly-skilled workers and supply chain as we shift to a lower-carbon future.”

Just Transition Minister, Richard Lochhead MSP, said: “Ensuring our journey to net-zero by 2045 is just and fair for everyone is critical, and the ambitious terms for the North Sea Transition Deal will be fundamental in achieving this. We will continue to engage with OGUK and UK Governments to ensure the plan for the sector is delivered.”

Deirdre Michie, CEO of OGUK, said: “In less than ten months, the UK Government and the offshore sector have made huge progress against the ambitious terms of the North Sea Transition Deal – working to reduce carbon emissions, invest in new energy technology and build the foundations for a just transition to net-zero by 2050. This is only the beginning, but I believe that through close cooperation with governments across the UK, we will deliver on the deal – which can act as a blueprint for collaboration in other countries.”

Areas of progress in North Sea Transition Deal

According to OGUK, the key areas of progress include supply decarbonisation with carbon emissions from the UK Continental Shelf down by 10 per cent since 2018; carbon capture, usage and storage with the government set to agree on a business model with industry by 3Q 2023 and the industry technical standards for CCS storage, currently in development, set to be released by 3Q 2022.

Furthermore, progress has been made in the field of hydrogen with the UK Government publishing its Hydrogen Strategy last August. Several hydrogen projects are either in progress or are under consideration.

When it comes to the supply chain, the strategy is currently in development to ensure the UK’s energy supply chain makes the most of the opportunities presented by the energy transition. In addition, the Prompt Payment Code is currently in development to ensure buying organisations pay suppliers on time.

People and skills is another area of progress noted by OGUK with the Energy Skills Alliance developing an integrated workforce plan and forecast to be released in 1Q 2022, which will focus on transitioning the workforce’s skills, progressing cross-sector training and standards to facilitate workforce mobility. Progress has also been made in delivering diversity and inclusion activities to address the issue of underrepresented groups in the workforce.