The UK’s North Sea oil industry may have survived one of the darkest market downturns in history during the Covid-19 pandemic, but the deepest gloom lies over the future of the fossil-fuel industry. Companies are braced for this week’s annual economic report from industry body Oil and Gas UK (OGUK). It is expected to lay bare the full toll of the pandemic on the ageing oil and gas basin last year. This much we already know: the measures brought in to restrict the spread of the virus triggered the sharpest drop in oil demand ever recorded, leading to a plunge in global oil markets and a slashing of budgets across the world’s biggest oil companies. In real terms, the global oil price fell to its lowest level since 2003. Its average price of $41.90 a barrel last year was more than a third down on the year before and almost 45% below the average over the past 20 years. The industry group is expected to set out a picture of an embattled sector brought to its knees by market forces, but preparing to emerge – in time – as an important employer and industrial partner in the government’s net-zero ambitions. What OGUK is less likely to admit is that perhaps the most important role it could play is not in promoting the North Sea’s economic benefits, but in prioritising the future of the basin’s workers in greener industries.
Observer 29th Aug 2021 read more »