The boss of the UK North Sea’s biggest producer is confident national net-zero targets can be factored into the sector’s operations without large volumes of indigenous oil and gas being left stranded.
Chrysaor chief executive Phil Kirk said the industry understood times were changing and was “behind” the Oil and Gas Authority’s (OGA’s) strategy review.
The OGA ran a consultation earlier this year on its intention to update its maximising economic recovery (MER) strategy to include a requirement for industry to help the UK Government reach its net-zero target.
In September, Neptune Energy chief executive Jim House said he and other industry veterans were concerned that the regulator had “lost a bit of balance” and was “going off too strongly” in the direction of net-zero, at the expense of MER UK.
Mr House warned that tipping the balance too far towards decarbonisation could “accelerate the timeline” for cessation of production from the basin.
The OGA said it had engaged widely on its strategy to integrate net-zero considerations and had received “strong support” for its direction of travel.
Asked whether the OGA focusing too heavily on net-zero at the expense of indigenous production was a concern he shared, Mr Kirk said: “No, it isn’t. I don’t have that concern.”
“The UK and Scottish governments’ direction of travel is very clear. Both have net-zero targets for 2050 and 2045, respectively.
“That is the way society and the home nations are heading. I think the industry recognises that times are changing and is behind the OGA’s ‘relook’ at the MER strategy.
“Given both governments’ stated aims and net-zero targets, I do not see how tagging those into the MER strategy necessarily dilutes the goal of trying to make money out of hydrocarbons in the UK and protecting jobs and supply.”
He added: “There are a lot of good things that can be done to make sure we’re producing hydrocarbons in a way that people are happy with and that the industry can be proud of.
“At the moment, I don’t see that changing the strategy necessarily leaves oil and gas in the ground.”
Mr Kirk does agree with Mr House on the need for a balance to be struck between security of supply, the safeguarding of UK jobs and the net-zero push.
He is convinced the oil and gas industry will play major part in the energy transition, which is another reason why he is “okay with” the net-zero aspects of the MER strategy.
In addition, Mr Kirk is comfortable with the UK Government’s plans to review its policy on the offshore oil and gas licensing regime.
Mr Kirk described it as an “ideal opportunity” for the industry to work with government and talk about how its work benefits the UK.
“It’s always comfortable to never be questioned about what you’re doing, but that’s unrealistic,” said Mr Kirk, who will become group president and chief executive for Europe at Chrysaor once it merges with Premier Oil in a reverse takeover next year.
Linda Cook, who heads up Chrysaor’s largest shareholder, Harbour Energy, will become chief executive of the combined group.
The deal will cement Chrysaor’s position as the biggest producer in the UK Continental Shelf, ahead of Total.
Red Rock Power forms 50:50 joint venture for Inchcape Offshore Limited
