Offshore Energies Magazine - Issue 55 Spring 2023

Welcome to Offshore Energies UK #55 T he new year has got off to a flying start for OEUK members. Our Share Fair event drew in the crowds for a day of talks about the industry and deal-making opportunities ( see p7 ) for the supply chain and its clients in Aberdeen in early February. It saw too the launch of a new report on the supply chain (s ee our website for a copy ). This work will continue, with more initiatives to invigorate buyers and sellers. We plan soon to launch an interactive supply chain roadmap which will shed more clarity on upcoming projects. Earlier sight of possible tenders helps contractors to hone their bids and in any case allows for better planning and hence the more rational outlay of resources. Companies working on bids for the Scottish wind licences (INTOG) have now been whittled down to just over a dozen as the negotiations enter their final phase ( see p10 ). And the end of March, a week before the Spring Statement, saw the publication of our annual Business Outlook . However, there is still no firm price floor below which the Energy Profits Levy would cease to apply, and the Energy Day a few days later concerned itself mostly with nuclear and carbon capture and storage (CCS) funding. While important in themselves, they do not give the exploration and production sector and all who work with it much reason for confidence in their long-term future. After all, the wholesale spot gas price has been considerably lower for some months ( see p24 ), and is nothing like as high as it was last year when the notion of a windfall tax began to gain political ground. Nevertheless, the windfall tax remains a major obstacle. Money has been taken off the table while serious thinking goes on in some of the biggest upstream boardrooms. There is little doubt that a lot of value could be lost, threatening an earlier government's plan to maximise the economic recovery of the UKCS following the 2014 publication of the Wood Report. And a number of other, greener initiatives that would unlock investment remain held up as the government has had much more urgent problems on its plate than it foresaw when it sketched out its route to net zero emissions (s ee p6 ). This is an unwelcome state of affairs for an economy the size of the UK, bearing in mind the security of supply question that is in the forefront of many people’s minds. Gas plays a very big role in domestic heating. The peak demand day in winter sees far more energy transported through the UK's pipelines than through its power cables. Industrial users all over Europe will also be considering their manufacturing future, in light of the prices on the other side of the Atlantic and the Inflation Reduction Act ( see p42 ). Given this seismic readjustment of Europe's supply-demand balance that the sanctions on Russia have occasioned and the magnified impact that events thousands of miles away now have on our gas market in particular, this quarterly magazine will broadenits horizons. But there is still much for our members to look forward to in the months ahead and celebrate: later in April there will be our technical conference on geoscience and the subsurface – the event will also cover CCS. We are also poised to launch a database on repurposing offshore equipment, a kind of exchange and mart for the by-products of the offshore decommissioning industry. Focusing on the present is a great way to anticipate the risks in the distance and a healthier way of adapting to change.

Editorial team

Published by Offshore Energies UK

Editorial team: William Powell David Jeffree Ross Jackson Contributors: Caroline Brown Jack French William Powell Graham Skinner

Copyright © 2023 The UK Offshore Energies Association Limited (trading as Offshore Energies UK). Offshore Energies UK 1st Floor, Paternoster House, 65 St Paul’s Churchyard, London EC4M 8AB

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Cover image: Wind, by Nick Baker Haste Copyright © 2022 AIS Survivex

ISSN 2053-5392 (Print), ISSN 2053-5406 (Online)

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