Why the decline in oil production?
Government figures have shown that production of both oil and gas has fallen at an average rate of around 5 percent each year since 2005. This is because the readily available stores of energy that were being tapped into beneath the North Sea have largely run out, leaving behind those areas that are a lot harder to exploit. Some experts believed that the peak in UK gas and oil production that was witnessed over a decade ago may never be achieved again.
So what has changed?
In 2010, oil prices rose to over $100 per barrel, generating money that the energy companies were able to invest in developing new programmes for extraction. Extensive reserves in the Central North Sea, the West Shetlands and the British section of the Southern Gas Basin are all set to begin production very soon. Although this is not expected to raise oil and gas production to any significantly higher level, it will nonetheless bring the decline to a standstill, or at least for a few years.
What does this mean for the future of the energy industry?
Investment, investment and further investment. New energy reserves need to be located and there is a critical requirement for new technologies to be developed in order to exploit the more challenging oil and gas fields. Last year saw a marked increase in the number of exploration projects that were granted approval by the UK government, notably those from some of the leading companies such as Total, GDF Suez, BP, BG Group and RWE Dea.
The current hiatus in the UK's oil and gas production alone is expected to bring benefits to the Treasury in the order of 2 billion pounds. This, coupled with the creation of new jobs and a potential 5.5 billion pounds in tax revenue added to the UK's budget and labour market, will bring a much welcomed breath of fresh air into Britain's long suffering economy.
With investment in Britain's oil and gas industry set to reach an all time high this year, the future looks rosy for those seeking jobs in the sector. For individuals with engineering qualifications and backgrounds the outlook looks especially promising, and there is also expected to be a sharp rise in demand for commissioning and construction roles. So it seems that graduates entering the oil and gas industry can look forward to a prosperous future.