PLANS from Europe for further regulation in the oil and gas industry would hit the UK, a report published yesterday warned.
The Oil and Gas UK 2012 economic report claims that production will be hampered by the proposed new measures which will put regulation in the hands of Brussels.
EU-wide rules on offshore drilling will involve all 27 governments, even though 90 per cent of all such drilling takes place on the territory of just four member states, including the UK.
Oil and Gas UK chief executive Malcolm Webb said: “We cannot stand back and simply let that happen. So we have objected to and will continue to oppose this damaging proposal.”
Meanwhile total capital investment on developing UK oil and gas reserves rose by 40 per cent to £8.5bn in 2011, according to the report. Total operating expenditure remained similar to 2010 at £7bn.
Production was also more costly than in previous years, with operating cost per barrel rising by a quarter from 2010 to $17 per barrel of oil.
The UK oil and gas industry has the potential to satisfy close to 50 per cent of the UK’s oil and gas demand in 2020 if the current rate of investment is sustained, the report said.
But in 2011 the UK produced 656m barrels of oil marking a reduction of 19.2 per cent from the 812m barrels of oil produced in 2010.