Investment in the UK's oil and gas industry is at its highest in over 30 years, an industry body said Monday.

The Oil & Gas UK 2013 Activity Survey revealed £11.4bn of investments in the sector in 2012. The survey expects the investments to climb to at least £13bn in 2013.　

It said a rise in capital spending facilitated trade as it created thousands of jobs, boosted oil and gas and bolstered tax revenues.

Investments during 2012 ranged from smaller projects of less than £50m through to some in excess of £1.0bn.

The number of projects submitted to the Department of Energy and Climate Change (DECC) and given development approval almost doubled between 2011 and 2012. The DECC has approved 33 projects since January 2012, an investment of £13.4bn.

"Here is some really good news for the UK," said Oil & Gas UK's Chief Executive, Malcolm Webb.

"After two disappointing years brought about by tax uncertainty and consequent low investment, the UK continental shelf (UKCS) is now benefitting from record investment in new developments and in existing assets and infrastructure, the strongest for more than three decades.

"The recent introduction of targeted tax allowances to promote the development of a range of difficult projects, coupled with the government's ground-breaking commitment to provide certainty on decommissioning tax relief, has prompted global companies and independent businesses alike to take another look at the UK as an investment destination and resulted in a new wave of investment. It is crucial that we sustain this momentum in the years ahead."

Production may fall again slightly this year to around 1.45-1.5m barrels of oil (boe) per day but the surge in investment is predicted to result in a significant upturn over the next three to four years, up to an estimated 2.0m boe per day by 2017.

"There has always been an over-riding case to maximise recovery of the UK's oil and gas resources. It has never been more important or relevant that we do so than now," Webb added.

"70% of British energy requirements will likely still need to be met by oil and gas into the 2040s. As a nation we need to satisfy as much of that demand as possible from our own resources."

RD

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