Oil and Gas UK

Oil and Gas UK

Background

Oil and Gas UK (OGUK) is a trade association representing the UK offshore oil and gas industry. Its website states that it is “proud to inform, engage and champion the UK offshore oil and gas industry as part of a diverse energy mix.” [1]

OGUK’s CEO, Deirdre Michie, has advocated for investment in carbon capture and storage (CCS) technology as a means of cutting emissions and argued that stopping domestic oil and gas production in the UK “makes no sense,” because this could increase imports from more emissions-intensive sources. [2]

OGUK’s website describes CCS as a “world-leading infrastructure,” and says it wanted to “kickstart” hydrogen in the UK, “building a platform to provide an alternative for heating, heavy industry, and transport.” [3]

OGUK’s reports have disputed the efficiency and reliability of renewable energy sources. A 2020 Economic Report argued that options for replacing oil and gas in transport and heating were “limited” and created “widespread technical and economic challenges.” [4]

In 2017, DeSmog reported that OGUK had met with ministers at least 49 times in the previous 3 years and spent around £15 million on lobbying each year. The group also took credit for securing tax breaks, including in George Osborne’s March 2015 budget.

In May 2020, OGUK warned of 30,000 job losses in the offshore oil and gas sector in the following 12 – 18 months due to pressures on the industry from the coronavirus pandemic.

Stance on Climate Change

According to the “Net Zero” page on its website, OGUK and its members are “committed to working collaboratively” toward the goals outlined in OGUK’s Roadmap 2035, a framework the organisation has designed to “lead the way through our energy transition and support the UK in achieving its net zero targets”. [3]

The Roadmap 2035 website identifies five areas for the industry to “help the UK achieve a green recovery as the economy returns to growth”: developing people and skills, driving technology and innovation, growing the economy and exports, helping meet UK energy needs, and supporting net zero. [5]

The Roadmap 2035 About page claims that it is “the first industry response to the Committee on Climate Change’s net-zero ambitions” and “represents an ambitious, yet sensible, framework” for the industry to “play its part”. It also states that “Oil and gas are vital to our daily lives and the UK industry is needed now more than ever before,” and that “even in a net-zero world, oil and gas will be extremely important” for “decades to come”. [6]

July 22, 2021

Oil and Gas UK CEO Deirdre Michie wrote an op-ed for The Scotsman arguing that a proposed oil and gas field off the coast of Shetland would “actually help the UK cut its carbon emissions” because the UK would be less reliant on imports “from countries with higher emissions and less commitment to act on them”. [7]

Michie stated that producing oil and gas domestically is “essential to both ensure the continued supply of the energy we need and to enable us to move faster to a lower carbon future”. Regarding campaigners’ arguments that the government should not approve the Cambo field for development, Michie said: [7]

“Campaigners would therefore have a bigger impact on tackling climate change if they urged governments to urgently develop the policies that are needed to significantly reduce consumer emissions, from the likes of vehicle use and gas boilers, in an affordable and practical way.” 

The article was shared by the official Twitter account of the Secretary of State for Scotland. [8] 

February 16, 2021

Oil and Gas UK CEO Deirdre Michie wrote an article on the government’s recently announced North Sea Transition Deal for The Times, which stated: 

“The North Sea transition deal will help us to continue to provide the affordable energy we need through oil and gas, produced with ever-decreasing emissions, while using our essential expertise and infrastructure to engineer the solutions that will be required for the future, including hydrogen and carbon capture and storage.” [9]

Funding

According to OGUK’s Directors’ Report and Financial Statements for the year ending December 2019, the group received a total income of £13,124,017, a £249,309 reduction from 2018. The company attributed the reduction to “a change in business model from a membership and shared data platform service to being a contract services provider to the [Oil and Gas Authority]”. Total costs for the group in 2019 were £13,275,316, with net assets of £2,675,935. [10]

The company reported that it had 418 members in 2019, an increase of 37 members from 2018, and identified the “primary threat” to its long-term future or financial stability would be a “significant decline in membership revenue”. [10]

Key People

Deirdre Michie is the CEO of OGUK. She has written articles for The Times, The Telegraph and The Herald, often advocating for the expansion of the domestic oil and gas sector and emphasising the potential of CCS and hydrogen technologies. A former Senior Commercial Negotiator at the Exploration and Production division of Shell, Mitchie was appointed as OGUK’s CEO in 2015. [11], [12], [13]

Michael Tholen is the Director of Sustainability at OGUK. He has made numerous comments in the media about the need to continue investing in UK domestic oil and gas production and that doing so will help the UK deliver a “net-zero future”. Tholen has worked for OGUK since 2007, holding the roles of Economics & Commercial Director and Upstream Policy Director before his current role. Previously, Tholen worked as an Economics & Commercial Director at the UK Offshore Operators Association (UKOOA), a trade association for exploration and production companies in the UK’s Continental Shelf, after holding two roles at Shell. [14], [15]

Actions

July 20, 2021

When asked about the oil and gas industry pushing ahead with new oil and gas developments despite the International Energy Agency’s (IEA) report that these projects will make it impossible to meet the goals of the Paris Agreement, OGUK’s Director of Sustainability Michael Tholen told DeSmog that the industry was “committed to achieve a net-zero future” but said the IEA report presented “one scenario of many which outline a potential pathway towards net zero”.

He added: 

“In the UK, oil and gas will still be needed going forward, as the Climate Change Committee has pointed out, so it is right that we look to meet as much of this as possible through production of our domestic resources so we can stay in control of emissions.”

July 14, 2021

Speaking in support of the potential development of the Cambo oil and gas field off the coast of Shetland, OGUK Director of Sustainability told The National: “The UK offshore oil and gas industry is changing and applying low carbon thinking to all its projects, including the Shetland-based Cambo project, to support the transition to greener, cleaner energy.” [16]

He added: 

“Cutting investment in UK projects will do little to reduce demand, which would instead be met by resources produced in other countries with no jobs, taxes paid or support to our energy supply chain, building a renewable capability from a firm business base.” [16]

June 3, 2021

OGUK CEO Deirdre Michie wrote an article for The Herald which advocated for the domestic production of oil and gas, contending that: “it makes no sense to stop producing oil and gas at home and start importing it from projects abroad where we have no control over emissions.” [2]

Commenting on the North Sea Transition Deal, which aims to reduce offshore production emissions by 10 percent by 2025 and 50 percent by 2030, Michie argued that: “Scotland is a key player here, and work is already under way to advance expertise in low-cost carbon capture and storage,” adding: “This involves repurposing legacy oil and gas fields to capture and store carbon, offering vast potential for clean energy production.” [2], [17]

April 12, 2021

In an op-ed for Energy Voice, OGUK Director of Sustainability Michael Tholen claimed that OGUK and the UK Government had, through the North Sea Transition Deal, found a “radical ‘middle way’ that ensures we can protect jobs in industrial heartlands, protect our energy security and protect our planet”. [18]

Tholen also said that the Deal would “deliver a major acceleration in low-carbon energy technology to ensure the UK is net zero by 2050, whilst ensuring offshore oil and gas continues to power our homes, hospitals and the economy, in an increasingly environmentally friendly way”. [18]

March 24, 2021

Speaking to BBC News, Michie commented on the government’s decision to continue new North Sea oil drilling, stating: “Ongoing exploration and production is compatible with net zero emissions – we’re pleased that the government has recognised this.” [19]

March 17, 2021

In response to a Telegraph report about the government considering a ban on new exploration licences in the UK North Sea, OGUK’s Director of Sustainability Michael Tholen said that “any curtailment of activity by licensing constraints risks impeding the UK’s ability to deliver a net-zero future, damaging our domestic supply chain, and increasing energy imports whilst exporting the jobs and skills.” [20], [21]

He added:

“The UK’s offshore oil and gas industry recognizes the urgent need for change and was one of the first sectors to commit to be a net-zero industry by 2050, setting demanding interim targets to halve its own emissions by 2030,” and that the industry could work with the government and the public to “help deliver the energy transition, providing the oil and gas the UK will need for decades to come while cutting the impact on the environment.” [21]

February 18, 2021

In an interview with S&P Global about the recovery of the UK North Sea oil and gas industry after the COVID-19 pandemic, OGUK’s Director of Sustainability Michael Tholen said of the challenge presented to the industry by climate change and environmental campaigners: “The issue is how the production arm… and how the supply chain arm of our sector also adapts and transforms, and the question is how do we do that in a way that’s least damaging to the environment and most beneficial to the economy.” [22]

Tholen said that he was “confident investment [in the industry] will pick up” after its struggles during the COVID-19 pandemic. [22]

Tholen also noted that electrification of offshore facilities would be key for upcoming oil and gas developments in the North Sea, including developments off the coast of Shetland like Siccar Point Energy and Shell’s Cambo field. Tholen said: “I’m pretty convinced all the operators looking at new field developments West of Shetlands [sic] recognize they’re going to have to be — if not immediately already ready — then designed to flip over to electricity import to the platforms.” [22]

December 3, 2020

Speaking to The Guardian, OGUK CEO Deirdre Michie criticised recommendations from the IPPR think tank to phase out North Sea oil and gas extraction as part of a strategy to achieve net zero carbon emissions by 2050. [23]

Describing this policy as a “blunt instrument” with potentially “unintended consequences” for job retention in the oil and gas sector, Michie argued that: “You run the risk of investment stopping from the day you say it, not from the date of the deadline.” She added: “If there is a framework, and clarity of direction, it enables people to work out how they are going to get there rather than saying: ‘By that point, game over.’ The game would be over from the day that you say it.” [23]

June 8, 2020

Speaking to BBC News about the impact of COVID-19 on companies and jobs in the oil and gas industry, OGUK CEO Dierdre Michie said

“There is a serious risk the UK loses the skills it needs not only to meet existing energy demands from domestic resources, but also to meet the UK’s climate ambitions.” [24]

2020

OGUK published a report outlining its targets for reaching net zero carbon emissions. While the report acknowledged that emissions from oil and gas were significantly larger than those from other sources, it stated: “it’s a fact that curtailing domestic production would only offshore the issue while increasing the UK’s reliance on imports, from potentially more intensive carbon sources adding to global emissions while shifting responsibility to others.” [25]

2020

OGUK’s 2020 Economic Report disputed the ability of low-carbon technologies to effectively replace oil and gas. It stated: “New technologies such as electric vehicles, hydrogen and ground source heating pumps are now emerging to displace conventional solutions, however the pace of change is constrained by their cost and technological maturity.” [4]

The report also stated that “during the upcoming period of transition, oil will continue to have an important role in an increasingly diverse energy mix,” adding: “without this investment, domestic production will decline at a faster rate than demand.” [4]

July 7, 2019

Speaking to The Times, Michie criticised calls to cease North Sea oil drilling, stating that: “It is not in anyone’s interests to portray the industry as the baddies when it can and needs to be a key partner to the UK’s net zero future.” [26]

Describing the North Sea as a “world-class supply chain renowned for cutting-edge solutions,” Michie said: “Prematurely shutting down the North Sea would only increase our reliance on imports and jeopardise the benefits of an industry anchored here.” [26]

March 20, 2018

Commenting on calls from the offshore wind industry for government support, Michie told The Telegraph that: “Oil and gas remain a vital part of the UK economy and will form most of our primary energy needs for many years to come,” adding: “The energy market is changing but we will remain relevant for many decades to come.” [27]

October 2016

Michael Tholen, then OGUK’s Upstream Policy Director, argued that the UK needed to invest in its domestic fracking industry in the wake of Brexit. 

Speaking to a House of Lords’ EU External Affairs Sub-Committee inquiry, Tholen said the government should develop a strategy for domestic shale gas extraction.

He said: 

“The UK’s energy and regulatory policy are creating an opportunity to access the UK’s onshore oil and gas resources, and are still changing. And we may find those continue to diverge from Europe post-Brexit.”

According to its website, the following organisations are members of OGUK, among others: [28]

Contact & Address

According to its website, OGUK can be reached at the following addresses: [29]

4th Floor
Annan House
33-35 Palmerston Road
Aberdeen
AB11 5QP

1st Floor
Paternoster House
65 St Paul’s Churchyard
London
EC4M 8AB

Social Media

Resources

  1. Who We Are,” Oil and Gas UK. Archived June 14, 2021. Archive.ph URL:  https://archive.ph/Wdgzk 
  2. Deirdre Michie. “North Sea oil and gas – let’s clean it up instead of moving it abroad,” The Herald, June 3, 2021. Archived June 7, 2021. Archive.ph URL: https://archive.ph/3LpSv 
  3. Net Zero,” Oil and Gas UK. Archived June 14, 2021. Archive.ph URL: https://archive.ph/PjJlv 
  4. Economic Report 2020,” Oil and Gas UK, 2020. Archived .pdf on file at DeSmog.
  5. Roadmap 2035,” Oil and Gas UK. Archived July 23, 2021. Archive.ph URL: https://archive.ph/suoqv 
  6. About,” Oil and Gas UK. Archived July 28, 2021. Archive.ph URL: https://archive.ph/rSWhN
  7. Dierdre Michie. “Climate change: Drilling new Cambo oil and gas field off Shetland will actually help the UK cut its carbon emissions,” The Scotsman, July 22, 2021. Archived July 23, 2021. Archive.ph URL: https://archive.ph/P3653
  8. Deirdre Michie, CEO of @OGUKenergy, writes in @TheScotsman on why the Cambo oil and gas project off the coast of Shetland should go ahead,” Tweet by @ScotSecofState, July 20, 2021. Retrieved from Twitter.com. Archived .png on file at DeSmog.
  9. Deirdre Michie. “The oil and gas industry is determined to achieve a lower-carbon future,” The Times, February 16, 2021. Archived June 14, 2021. Archive.ph URL: https://archive.ph/Sk68V
  10. Directors’ Report and Financial Statements – The UK Oil and Gas Industry Association Limited,” Companies House, September 21, 2020. Archived .pdf on file at DeSmog.
  11. Deirdre Michie,” Muckrack. Archived June 15, 2021. Archive.ph URL: https://archive.ph/6Mtrb 
  12. Scots woman appointed as new head of UK Oil and Gas,” ScottishEnergyNews. Archived June 15, 2021. Archive.ph URL: https://archive.ph/D9DNn 
  13. Deirdre Michie OBE,” LinkedIn. Archived June 15, 2021. Archive.ph URL: https://archive.ph/uJVd2
  14. Michael Tholen” on LinkedIn. Archived on July 28, 2021.
  15. Andreas Exarheas. “North Sea Exploration Ban Impact,” Rigzone, March 17, 2021. Archived July 28, 2021. Archive.ph URL: https://archive.ph/ythV7
  16. Abbi Garton-Crosbie. “Cambo oil field: ‘Resolutely reject’ Shetland field UK told,” The National, July 14, 2021. Archived July 19, 2021. Archive.ph URL: https://archive.ph/3p1Re 
  17. North Sea Transition Deal,” GOV.UK, March 24, 2021. Archived June 7, 2021. Archive.ph URL: https://archive.ph/XMppB 
  18. Mike Tholen. “North Sea Transition Deal lays foundation for innovation investment,” Energy Voice, April 12, 2021. Archived April 12, 2021. Archive.ph URL: https://archive.ph/1WyZ3
  19. Roger Harrison. “UK seeks to drill more oil and gas from North Sea,” BBC News, March 24, 2021. Archived May 8, 2021. Archive.ph URL: https://archive.ph/3eyLf 
  20. Rachel Millard and Emma Gatten. “Beginning of end for North Sea as ministers consider exploration ban,” The Telegraph, March 13, 2021. Archived May 20, 2021. Archive.ph URL: https://archive.ph/AsJE3 
  21. Andreas Exarheas. “North Sea Exploration Ban Impact,” Rigzone, March 17, 2021. Archived on July 28, 2021. Archive.ph URL: https://archive.ph/ythV7 
  22. Nick Coleman. “Interview: Low-carbon electrification key to North Sea revival: OGUK,” S&P Global, February 18, 2021. Archived July 28, 2021. Archive.ph URL: https://archive.ph/9GBND 
  23. Jillian Abrose. “Oil and gas firms urged to work towards net zero British North Sea,” The Guardian, December 3, 2020. Archived June 6, 2021. Archive.ph URL: https://archive.ph/fp0l7 
  24. BP to cut 10,000 jobs as virus hits demand for oil,” BBC News, June 8, 2020. Archived on July 27, 2021. Archive.ph URL: https://archive.ph/V02Jt 
  25. Pathway to a Net-Zero Basin: Production Emissions Targets,” Oil and Gas UK, 2020. Archived June 29, 2021. Archive.ph URL: https://archive.fo/D9fVr 
  26. Mark Macaskill. “North Sea firms ‘not the enemy’ in climate battle,” The Times, July 7, 2019. Archived July 8, 2021. Archive.ph URL: https://archive.ph/fopB5 
  27. Jillian Ambrose. “Turbines or oil rigs? Ministers to mull both for ‘transformative’ sector deal,” The Telegraph, March 20, 2018. Archived June 8, 2021. Archive.ph URL: https://archive.ph/1Sg1S 
  28. Operators directory,” Oil and Gas UK. Archived on July 27, 2021. Archive.ph URL: https://archive.ph/TLFyk
  29. Contact us,” Oil and Gas UK. Archived on July 27, 2021. Archive.ph URL: https://archive.ph/8uGF8

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