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SUPPLY
Nearly all of the UK’s oil and gas comes from the North
Sea. The Southern North Sea is a gas province while the Central and
Northern North Sea contain oil and associated gas fields. Production of
oil peaked in 1999 and will decline year on year, barring brief
reversals as new fields are put into production. To a certain extent
decline rates will be reduced in the short term by the application of
marginal and satellite field technologies and by government initiatives
to promote exploration.
Gas production peaked in 2000 and here too there is little chance of
reversing long term steady decline except for short periods.
Other regions to the west of Britain are also mature although some new
deeper water gas potential may be realised in the extreme northwest over
the longer term.
DEMAND
Oil
consumption in the UK has fallen substantially since 2005 due to higher
prices and the recession. It will probably remain flat for the next
decade, kept lower by strategies to improve liquid fuel economy in the
transport industry and by the recession, which has reduced the use of
automobiles. However oil exports have also declined due to reduced
production. The UK became a net oil importer in 2006 and 2007 and will
do so again, this time permanently, in 2009.
Gas consumption was increasing up to 2004 as a result of an expanding
economy and fuel substitution for economic and environmental reasons but
has since declined, along with North Sea output. Growth is expected to
be re-established in 2010 as improved import facilties are built (pipes
and LNG) and as world gas prices have fallen following the 2008/2009
recession. The country returned to becoming a net gas importer in 2004.
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