Released on = April 16, 2007, 9:03 pm

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = This market report analyses the UK offshore oil and gas
industry, which covers activities in the waters surrounding the UK, known as the UK
Continental Shelf (UKCS). In 2005, total sales of oil, gas and related products
amounted to £28.69bn, an increase of 22.8% on 2004.

Press Release Body =
Offshore Oil & Gas Industry : Market Report 2006
This market report analyses the UK offshore oil and gas industry, which covers
activities in the waters surrounding the UK, known as the UK Continental Shelf
(UKCS). In 2005, total sales of oil, gas and related products amounted to £28.69bn,
an increase of 22.8% on 2004. Government revenues and taxes attributable to UK oil
and gas production reached an estimated £9.7bn in 2005/2006, up by 84.7% on the
previous year.

Oil and gas production is falling. At 182.1 million tonnes of oil equivalent (mtoe),
output in 2005 was 9.9% lower than 2004\'s output and 22.4% lower than it was in
2001. Oil and gas account for roughly equal shares of UKCS output.

41 years after the first recoverable reserves were discovered in the UKCS, the UK
oil and gas industry is a mature one. While there are likely to be some short-term,
small increases in output, as a few remaining large fields come on stream and the
lives of older fields are extended, the long-term future will be one of decline,
unless new major discoveries are made. The more recent discoveries have been smaller
than earlier discoveries and they are also more difficult and expensive to bring
into production. Some of the larger international oil and gas companies are selling
their less attractive UKCS assets and switching their attention to other parts of
the world, which give better returns on investment.

In the context of the recent government Energy Review, the UK offshore oil and gas
industry has an important role to play in providing energy for the UK. Longer term,
UK energy needs will have to be met by an increasing amount of oil and gas imports,
much of which will come from countries where the culture and politics are very
different from those in the UK.

Issues of particular concern to the UKCS oil and gas sector include recent rises in
taxation (which could deter companies from investing in the industry) and
decommissioning of redundant structures and pipelines (during the next 20 years,
hundreds of structures and pipelines will have to be removed and disposed of in an
environmentally acceptable manner).

The UK will be dependent on fossil fuels for decades to come, but carbon emissions
are a serious disadvantage of this type of fuel. There is currently a major debate
about whether or not to renew the UK\'s ageing nuclear power stations, all of which
are due to be withdrawn from service in the 2020s. Nuclear power has the advantage
of not producing carbon emissions, but the renewal of nuclear power plant would
reduce the market for gas in gas-fuelled power plant.

The future of the UK oil and gas industry largely rests on international oil prices.
Owing to the hostile environment in which oil and gas in the UK are recovered, the
UK market is based on high prices. The current conflicts in the Middle East and
unrest in other oil- and gas-producing countries raises the possibility that the UK
could experience disrupted oil and gas supplies from these regions. Moreover, large
emerging economies such as China and India will be major competitors for the world\'s
energy resources. Any escalation of these factors could lead to renewed efforts to
extract the maximum possible oil and gas from the UKCS, even at a very high cost.
There has been a rise in the number of exploration licences taken out in the 2005
licensing round, an indication of sustained, but high risk (of not finding
recoverable reserves), interest in the UK offshore oil and gas industry.

Web Site = www.bharatbook.com

Contact Details = 207, Hermes Atrium,
Sector 11, Plot No.57
CBD Belapur