- The United Kingdom (U.K.) is the largest producer of oil and second-largest producer of natural gas in the European Union (E.U.). After years of being a net exporter of both fuels, the U.K. became a net importer of natural gas and crude oil in 2004 and 2005, respectively. Production from U.K. oil and natural gas fields peaked in the late 1990s and has declined steadily over the past several years, as the discovery of new reserves has not kept pace with the maturation of existing fields.
- The U.K. government, aware of the country's increasing reliance on imported fuels, has developed key energy policies to address the domestic production declines. These include: enhanced recovery from current and maturing oil and gas fields, ensuring energy security, promoting cooperation with Norway, and decarbonizing the U.K. economy by investing heavily in renewable energy.
- The UK government does not hold a direct interest in oil production, but this sector remains important to the government because Corporation Tax and Supplementary Tax income from the sector accounts for about 25 percent of UK corporate tax receipts, according to Oil and Gas UK.
- The sector, which includes the administration of licensing, is regulated and overseen by UK's Department of Energy and Climate Change (DECC). The DECC licensing-related activities are outlined in the 1934 Petroleum Act and the 1964 Continental Shelf Act. Six types of licenses, the so-called "Seaward Production Licenses," can be awarded in the UK, which differ in length of time awarded and cost of license.
- The UK Continental Shelf (UKCS), located in the North Sea off the eastern coast of the U.K., contains the bulk of the country's oil reserves. There are also sizable reserves in the North Sea north and west of the Shetland Islands. Besides these offshore assets, the U.K. also has the Wytch Farm Oil Field located in the Wessex Basin, the largest onshore oil field in Europe, which has produced more than 400 million barrels of oil over its 35-year life.
- The UK produced 1.5 Tcf of dry natural gas in 2011, falling about 5 percent compared with the previous year. During 2011, gross natural gas production totaled 1.7 Tcf. Data published by PFC Energy indicate that UK's gross natural gas production in 2012 was about 15 percent lower than the year prior, the lowest level since 1985. In addition to the long-term declining production trend, natural gas output fell as a result of the Elgin gas leak that affected natural gas production since it occurred in March 2012. According to PFC Energy, UK gross natural gas production totaled 1.5 Tcf in 2012.
- The largest concentration of natural gas production in the UK is the Shearwater-Elgin area of the Southern Gas Basin. The area contains five gas fields: Elgin, Franklin, Halley, Scoter, and Shearwater. Most of the leading oil companies in the UK are also the leading natural gas producers, including BP, Shell, and ConocoPhillips.
- UK's largest share of natural gas production among all fields and gathering systems comes from the Scottish Area Gas Evacuation (SAGE) system, which produced a total of 246 Bcf in 2011. The SAGE system includes the Atlantic, Beinn, Beryl, Boa, Brae (Central, East, North, South, West), Braemar, Britannia, Brodgar, Caledonia, Callanish, Cromarty, Enoch (UK), Kingfisher, Larch, Maclure, Ness, Nevis, Scott, Skene, Thelma, Tiffany, Toni, and Tullich fields.
- In addition to SAGE, the Shearwater-Elgin Area Line (SEAL) brought in more than 200 Bcf of natural gas during the year. Producing fields that feed this line include Elgin, Franklin, Glenelg, Halley, Scoter, Shearwater, and Starling.
- For a comprehensive list of UK fields, see UK Oil and Gas Fields by Approval Date
- For further information, see Exploration and Production in the UK
- A List of Oil Production Platforms in the UK and List Of Oil and Gas Production Platforms In The UK is also available
- Nexen was the largest operator in the UK in terms of oil production
- BP is also a significant operator in the UK
- Three main grades of oil are produced in the UK: Flotta, Forties, and Brent blends. They are generally light and sweet, which makes them attractive to foreign buyers.
- There is an extensive network of pipelines in the U.K. to carry oil extracted from North Sea platforms to coastal terminals in Scotland and northern England.
- BP operates the 110-mile, 36-inch Forties Pipeline System, linking fields in the Forties system to the oil terminal at Cruden Bay, Scotland. The company also operates a 110-mile, 36-inch pipeline the Ninian Crude Oil Pipeline, connecting the Ninnian system to the Sullom Voe Oil Terminal on Shetland Island.
- Britoil Plc operates a 150-mile, 24-inch pipeline linking the Bruce and Forties fields to Cruden Bay and Talisman operates a 130-mile, 30-inch pipeline connecting the Piper system with Flotta on Orkney Island.
- Shell and Esso jointly operate a 93-mile, 36-inch connection between the Cormorant oil field and Sullom Voe Oil Terminal.
- There are also numerous, small pipelines that connect each North Sea oil platform to these major backbones. Finally, the U.K. does have a few onshore crude oil pipelines, including a 90-mile, underground pipeline operated by BP that links the Wytch Farm field to the refinery at Fawley and the nearby oil export terminal at Southampton.
- The U.K. has a single international crude oil pipeline, the 220-mile, 34-inch Norpipe Crude Oil Pipeline operated by ConocoPhillips. With a capacity of 900,000 bbl/d, Norpipe connects Norwegian oil fields in the Ekofisk system to the oil terminal and refinery at Teesside.
- Domestic System
- There are four main pipeline systems in the U.K. that carry natural gas from offshore platforms to coastal landing terminals.
- The Shearwater-Elgin Area Line (SEAL) Gas Pipeline, operated by Shell, transports gas from the Shearwater-Elgin area to the landing terminal at Bacton, England.
- ExxonMobil operates the 200-mile, 30-inch Scottish Area Gas Evacuation (SAGE) Pipeline, which transports associated natural gas from UKCS fields to the landing terminal at St. Fergus, Scotland.
- The 250-mile, 36-inch CATS Central Area Transmission System Gas Pipeline, operated by BP, links fields in the Central North Sea to Teesside.
- Finally, Shell operates the 283-mile Far North Liquids and Associated Gas System (Flags) Pipeline linking associated gas deposits in the Brent oil system with St. Fergus.
- Once brought onshore, the responsibility for transporting natural gas throughout the country belongs to the utilities operating in the U.K., including National Grid and Scotia Gas Networks.
- A consortium of companies operates the UK Interconnector Gas Pipeline between Bacton, England and Zeebrugge, Belgium. The Interconnector, inaugurated in 1998, is capable of bi-directional operation, meaning either it can export natural gas from the UK to continental Europe (“Forward Mode”), or it can import natural gas into the U.K. (“Reverse Mode”).
- Since it began operating, the Interconnector has mostly operated in Forward Mode, however during late fall and winter seasons, the pipeline has tended to operate in Reverse Mode. The pipeline has undergone three phases of expansion, with additional capacity and compression added to it between 2005 and 2007. Interconnector is currently capable of transporting 2.0 Bcf/d in Forward Mode and 2.6 Bcf/d in Reverse Mode.
- The U.K. also imports natural gas through the Frigg UK Gas Pipeline System, operated by Total. Frigg connects the St. Fergus gas terminal with the Frigg gas field in the Norwegian sector of the North Sea.
- Finally, the U.K.-Eire Interconnector connects the U.K. with the Republic of Ireland, running from Moffat, Scotland to Dublin.
- Currently, the U.K. has four LNG import terminals and the country was the eighth-largest importer of LNG in 2010.
- The longest-operating LNG terminal in the U.K. is National Grid's Grain LNG Terminal on the Isle of Grain. The facility originally became operational in 2005, and with a number of expansions, the terminal can receive and process 160 Bcf per year of LNG.
- Teesport LNG, operated by the U.S.-based Excelerate Energy, commenced commercial operation in February 2007. This was the first dockside regasification port and the second operational LNG facility in the U.K. Teesport LNG can deliver up to 600 MMcf/d of natural gas to the UK market
- The Dragon LNG Terminal, a collaboration of BG, Petronas, and 4Gas, commenced operation in September 2009. The import, storage, and regasification terminal is located in Milford Haven in South Wales and has a sendout capacity of 1.1 Bcf/d.
- The South Hook LNG Terminal, also located in Milford Haven, Wales, is owned and operated by Qatar Petroleum, ExxonMobil, and Total. Europe's largest LNG terminal became commercially operational in October 2009 with an initial capacity of 1.1 Bcf/d. When fully commissioned (following the Phase II completion), the terminal's capacity is expected to reach 2.1 Bcf/d.
- There are 7 refineries operating in the UK
- The largest is Exxons Fawley Southampton Refinery but its capacity is being reduced. The other refineries are the Ineos / Petrochina Grangemouth Refinery, Phillips 66 Humber Refinery, Total Lindsey Oil Refinery, Murco Milford Haven Refinery, Valero Pembroke Refinery, and Essar's Stanlow Refinery
- The Coryton Refinery and Port Clarence Teeside Refinery which were both owned by Petroplus have been closed down in recent years
- EIA UK Profile
- The Offshore Petroleum Production And Pipe-Lines (Assessment Of Environmental Effects) Regulations 1999 And Petroleum Act 1998