Economic Report 2017

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E conomic R eport 2 017 - F acts and F igures

E C ONOM IC R E P OR T 2 0 1 7 E C M C R E P R T 2 0 1 7

of the UK’s energy mix will still come from oil and gas by 2035

4. The Business Environment

The average Brent oil price was 30% higher over the first half of this year than the same period last year The oil and gas industry supports over 300,000 jobs in the UK Every £1 million of industry expenditure sustained around 17 jobs across the UK economy last year The average NBP day-ahead gas price was

The UK Government forecasts that

In Sum m ar y T he last year has seen signiĮcant changes to the ďusiness e nv ir onm e nt w it h in w h ich t h e oil and gas indust r y op e r at e s. ommodity Ɖrices and Ɖolitical and regulatory issues, most notaďly redžit, haǀe dominated the agenda͘ Against this ďacŬdroƉ, industry has Ɖursued eĸciency imƉroǀements aimed at driǀing transĨormational change͘ solatility in oil and gas marŬets has continued oǀer the Įrst sidž months oĨ this year, although there are some signs oĨ oil Ɖrice recoǀery Ĩrom t h e r e ce nt low s of 2016 . T h e av e r age dat e d Br e nt p r ice w as ϯ0 Ɖer cent higher oǀer the Įrst halĨ oĨ this year than in the same p e r iod last y e ar . T h e longe r - t e r m out look for oil p r ice s r e m ains unƉredictaďle, ǁith the maũor uncertainty ďeing the resilience oĨ suƉƉly Ĩolloǁing the gloďal reduction in inǀestment͘ T h e av e r age NBP day - ah e ad gas p r ice w as 40 p e r ce nt h igh e r ov e r t h e Įrst halĨ oĨ 2017 than it ǁas last year, ďut the Ɖrice has droƉƉed ďacŬ since͘ Although demand Ĩor gas is Ĩorecast to continue to rise oǀer the nedžt decade, the Ɖace oĨ groǁth ǁill not match that oĨ suƉƉly in a marŬet ǁhere Ɖroduction costs haǀe Ĩallen raƉidly oǀer recent years͘ Br e x it b r ings anot h e r m acr o- e conom ic unce r t aint y int o p lay t h at ǁill ďe considered ǁhen inǀestors are assessing oƉƉortunities on the UK ^͘ In the shortͲterm, the ǁeaŬening oĨ ^terling in resƉonse to redžit ǁas Ɖositiǀe Ĩor many oil and gas comƉanies, Ɖarticularly p r oduce r s w it h a local cost b ase and sup p ly ch ain com p anie s w it h a ƉroƉensity to edžƉort͘ ,oǁeǀer, in the long term, there are still a ǁide range oĨ Ɖotential aƉƉroaches to hoǁ the UK ǁill leaǀe the U, each ǁith diīerent imƉlications Ĩor the oil and gas industry͘ Oil & Gas UK, on ďehalĨ oĨ its memďers, has emƉhasised to goǀernment the need to maintain a strong ǀoice in uroƉe, enaďle continued Ĩrictionless access to marŬets and laďour, and to Ɖrotect energy trading and the internal e ne r gy m ar ke t . T e average Brent oil price was 30% higher over the first half of this year th n the same period last year of the UK’s energy mix will still come from oil and gas by 2035 2 / 3 The oil and gas industry supports over The average Brent oil price w s 30% higher over the first half The UK Government forecasts t at of the UK’s energy mix will still come from oil and gas by 2035 The average NBP day-ahead gas price w s 300,000 jobs in the UK 2 / 3 40% higher

omic R port 2 017 nd F igures

40%

higher

sets out aspirations for the industry over the first half of 2017 than the same period last year

By the end of 2018 over The industry could deliver hundreds of billions of pounds in additional revenue to the UK by 2035 The cost of industry trade could increase by as much as per annum if the UK reverts to World Trade Krganinjation rules £500 million of total production will come from start-ups post-2016 1 / 3

sets out aspirations for the industry over the first half of 2017 than the same period last year

of this year than the same period last year

2 2 2 2

The industry could