Offshore Energies UK (previously Oil and Gas UK)

Offshore Energies UK (OEUK)

Background

Offshore Energies UK (OEUK) (formerly Oil and Gas UK (OGUK)) is a trade association representing the UK offshore oil and gas industry. Its website states that it is “proud to inform, engage and champion the UK offshore oil and gas industry as part of a diverse energy mix.”¹

OGUK’s CEO, Deirdre Michie, has advocated for investment in carbon capture and storage (CCS) technology as a means of cutting emissions and argued that stopping domestic oil and gas production in the UK “makes no sense,” because this could increase imports from more emissions-intensive sources.²

OGUK’s website describes CCS as a “world-leading infrastructure,” and says it wanted to “kickstart” hydrogen in the UK, “building a platform to provide an alternative for heating, heavy industry, and transport.”³

OGUK’s reports have disputed the efficiency and reliability of renewable energy sources. A 2020 Economic Report argued that options for replacing oil and gas in transport and heating were “limited” and created “widespread technical and economic challenges.”⁴

In 2017, DeSmog reported that OGUK had met with ministers at least 49 times in the previous 3 years and spent around £15 million on lobbying each year. The group also took credit for securing tax breaks, including in George Osborne’s March 2015 budget.

In May 2020, OGUK warned of 30,000 job losses in the offshore oil and gas sector in the following 12 – 18 months due to pressures on the industry from the coronavirus pandemic.

Stance on Climate Change

According to the “Net Zero” page on its website, OGUK and its members are “committed to working collaboratively” toward the goals outlined in OGUK’s Roadmap 2035, a framework the organisation has designed to “lead the way through our energy transition and support the UK in achieving its net zero targets”.⁵

The Roadmap 2035 website identifies five areas for the industry to “help the UK achieve a green recovery as the economy returns to growth”: developing people and skills, driving technology and innovation, growing the economy and exports, helping meet UK energy needs, and supporting net zero.⁶

The Roadmap 2035 About page claims that it is “the first industry response to the Committee on Climate Change’s net-zero ambitions” and “represents an ambitious, yet sensible, framework” for the industry to “play its part”. It also states that “Oil and gas are vital to our daily lives and the UK industry is needed now more than ever before,” and that “even in a net-zero world, oil and gas will be extremely important” for “decades to come”.⁷

July 22, 2021

Oil and Gas UK CEO Deirdre Michie wrote an op-ed for The Scotsman arguing that a proposed oil and gas field off the coast of Shetland would “actually help the UK cut its carbon emissions” because the UK would be less reliant on imports “from countries with higher emissions and less commitment to act on them”.⁸

Michie stated that producing oil and gas domestically is “essential to both ensure the continued supply of the energy we need and to enable us to move faster to a lower carbon future”. Regarding campaigners’ arguments that the government should not approve the Cambo field for development, Michie said:

“Campaigners would therefore have a bigger impact on tackling climate change if they urged governments to urgently develop the policies that are needed to significantly reduce consumer emissions, from the likes of vehicle use and gas boilers, in an affordable and practical way.”

The article was shared by the official Twitter account of the Secretary of State for Scotland.⁹

February 16, 2021

Oil and Gas UK CEO Deirdre Michie wrote an article on the government’s recently announced North Sea Transition Deal for The Times, which stated:

“The North Sea transition deal will help us to continue to provide the affordable energy we need through oil and gas, produced with ever-decreasing emissions, while using our essential expertise and infrastructure to engineer the solutions that will be required for the future, including hydrogen and carbon capture and storage.”¹⁰

Funding

According to OGUK’s Directors’ Report and Financial Statements for the year ending December 2019, the group received a total income of £13,124,017, a £249,309 reduction from 2018. The company attributed the reduction to “a change in business model from a membership and shared data platform service to being a contract services provider to the [Oil and Gas Authority]”. Total costs for the group in 2019 were £13,275,316, with net assets of £2,675,935.¹¹

The company reported that it had 418 members in 2019, an increase of 37 members from 2018, and identified the “primary threat” to its long-term future or financial stability would be a “significant decline in membership revenue”.

Key People

Deirdre Michie is the CEO of OGUK. She has written articles for The Times, The Telegraph and The Herald, often advocating for the expansion of the domestic oil and gas sector and emphasising the potential of CCS and hydrogen technologies. A former Senior Commercial Negotiator at the Exploration and Production division of Shell, Mitchie was appointed as OGUK’s CEO in 2015.¹²^, ¹³^, ¹⁴

Michael Tholen is the Director of Sustainability at OGUK. He has made numerous comments in the media about the need to continue investing in UK domestic oil and gas production and that doing so will help the UK deliver a “net-zero future”. Tholen has worked for OGUK since 2007, holding the roles of Economics & Commercial Director and Upstream Policy Director before his current role. Previously, Tholen worked as an Economics & Commercial Director at the UK Offshore Operators Association (UKOOA), a trade association for exploration and production companies in the UK’s Continental Shelf, after holding two roles at Shell.¹⁵^, ¹⁶

Actions

9 July, 2023
A Guardian report detailed how a Scottish MP, David Duguid, had met with OEUK lobbyists nine times during his tenure as junior energy minister between 2021 and 2022. Duguid was also vice-chair of the All Party Parliamentary Group (APPG) on the British oil and gas industry.¹⁷

June 28, 2023

In a report published by EnergyVoice, OEUK CEO David Whitehouse is quoted saying that the UK’s Climate Change Committee (CCC) put out a “paradoxical” report over its findings that the UK was failing to build enough low-carbon energy whilst green-lighting a new coal-fired power plant in Cumbria.¹⁸

He said:

“On the one hand, it warns that the UK is being far too slow at building the infrastructure vital for generating low carbon electricity … But the same report also supports a ban on exploring UK waters for new sources of gas and oil, so depriving the UK of that resource too.”

“Put together, these policies mean the UK risks creating its own home-grown energy crisis – and that will hit home around 2028. That’s likely to be when the next government is seeking re-election.”

June 26, 2023

OEUK CEO David Whitehouse wrote an opinion piece for Conservative Home in which he argued for continued oil and gas exploration in the north sea, as “the offshore sector stand at the forefront” of decarbonisation efforts, adding that “it is necessary to continue exploring and producing oil and gas.”¹⁹

He said:

“Britain possesses abundant natural energy resources, a skilled workforce, and a track record of driving innovation. It is crucial that we capitalise on these strengths to deliver the lowest energy costs in Europe, ensure energy security, and achieve our climate goals. To undermine our home-grown oil and gas industry would jeopardise critical industries and jobs across the UK, including manufacturing and vital product supply chains.”

May 30, 2023

An article in the Energyst reported OEUK’s opposition to Keir Starmer’s announcement to block developments of new oil and gas fields in the north sea, specifically that the plan would “undermine Britain’s energy security, threaten jobs, and send import bills surging.”²⁰

David Whitehouse, OEUK’s CEO, said: “People wouldn’t forgive anyone who shut down Britain’s oil and gas industry only to replace it with imports of foreign oil and gas.

“Labour’s proposals are also very unclear, especially on costs. Our sector now needs clarity on the detail of Labour’s plans including analysis on what they mean for jobs, energy security, imports, and Britain’s overall economy.”

We need to meet our climate goals but without undermining UK energy security, the economy and our skilled workforces – the very people needed to deliver lower carbon, secure and affordable energy.”

May 16, 2023

An OEUK press release showed the organisation’s opposition to the windfall tax on profits from energy companies operating in the north sea, labelling it a “supertax” which “threaten to drive out investors and drive up imports, leaving consumers increasingly expose to global shortages.”²¹

The press release quotes Jim Ratcliffe, the CEO of chemical giant INEOS, who said:

“What the country needs is energy security, which means encouraging developments in our strategic energy reserves in the North Sea, not taxing it out of existence and shutting down the basin.

The UK government’s so-called windfall tax is really primitive politics. There has been no thought given to the long-term consequences of this ‘tax it to death’ move.”

May 15, 2023

In a World Oil piece, Mike Tholen, OEUK’s director of sustainability is quoted saying the UK cannot survive without oil and gas for the foreseeable future, making the case for continued investment in hydrocarbons.²²

He said:

“We need to move to lower carbon energy, but the scale of the change means it will take years. There is no simple choice between oil and gas and renewables – for the foreseeable future we will need both.

That’s why we need to keep investing in exploring and developing new and existing fields in our own waters”

May 11, 2023

A report by Friends of the Earth published in Yahoo revealed that OEUK had met Scottish ministers over 36 times to lobby for the opening of a new oilfield, Rosebank oilfield, in the north sea, in 2021 and 2022. The piece showed that OEUK’s efforts were part of an ‘insidious power’ that the oil and gas industry holds over Scottish politicians, particularly in regard to opening up new exploration.

The report also showed that OEUK chaired a 2022 cross-party group on oil and gas, where the oilfield was discussed, which was attended by six MSPs.²³

April 24, 2023

An article Energy Voice outlined that, in the face of industrial strike across OEUK member organisations, OEUK said strike action “does not offer a solution.”²⁴

Irene Bruce, Energy Services Argreement manager at OEUK said:

“Workers in all sectors across the UK are feeling the impact of the cost-of-living crisis, however industrial action does not offer a solution, nor is it helpful for our sector, which is doing all it can to attract the investment essential to protect jobs and meet the UK’s energy needs.”

April 19, 2023

OEUK called on the UK government to reduce windfall taxes in line with energy price decreases in March 2023, saying “when prices drop, it is fair that the windfall tax should fall away”.

OEUK CEO David Whitehouse said that the windfall tax had “damaged the confidence” of North Sea oil and gas companies to invest in the UK’s energy sector, adding that “if this tax is changed, as conditions and prices have changed, that would be a positive move that would go some way to start rebuilding confidence”.²⁵

April 18, 2023

OEUK welcomed news that Shell had restarted operations in the Pierce oil field in the North Sea, according to a release from World Oil.

OEUK’s market intelligence manager Ross Dornan, said:

“This a major investment by Shell and the redevelopment of this field is great news for the energy industry and the economy as a whole, as it means the field can produce gas as well as oil for the UK market.”²⁶

April 11, 2023

In a press release, OEUK CEO David Whitehouse welcomed a Scottish Government announcement of an extra £25m for the energy transition, but warned of the need to support oil and gas for “years to come”.²⁷

He said:

“The people and skills in the offshore oil and gas sector are the same ones driving the expansion of wind, hydrogen, carbon capture and storage – all solutions that will be key in our drive to reach net zero by 2045. We look forward to working with the Scottish Government to achieve this.”

March 30, 2023

OEUK CEO David Whitehouse wrote a piece for The Herald Scotland in which he urged the then-newly elected first minister of Scotland Humza Yousaf to invest in UK oil and gas and remove the windfall on north sea production which he terms a ‘supertax.’²⁸

He said:

“If we undermine our existing oil and gas producers, we undermine our ability to drive a home grown energy transition, and we will continue to simply import the transition with a bad outcome for jobs and our communities.”

March 29, 2023

Speaking in Aberdeen regarding OEUK’s Business Outlook report, CEO David Whitehouse was quoted as saying that the UK needs to “get serious” on driving down demand for fossil fuels if it is to meet its net zero commitments.

In defence of fossil fuels, Whitehouse said: “there is no simple choice between oil and gas on the one hand and renewables on the other – the reality is that we need both.”²⁹

March 24, 2023

World Oil published a piece, quoting OEUK CEO David Whitehouse who called for the to government invest in North Sea oil and gas and cut the 75% windfall tax, in order to “encourage growth, boost jobs, cut emissions and protect our energy security.”³⁰

He also argued that oil and gas will be necessary for decades:

“As we build that future there is no simple choice between oil and gas or renewables. The reality is we need both.

We need government to confirm its continued support for UK oil and gas production and provide clarity on the price floor for the energy profits levy. This will give companies the confidence to invest in UK energy and drive economic growth, jobs and progress towards net zero in a way that benefits UK industries of the future.”

March 6, 2023

OEUK appointed a new CEO, David Whitehouse, who vowed to lobby the government to ensure “that election manifestos are aligned with the needs of the [oil and gas] industry” and criticised windfall taxes on north sea oil and gas, according to a report published by EnergyVoice.³¹

Of windfall taxes he said:

“It is just not credible that you would tax on a global basis. Taxes are paid where they’re made, that’s the way the system works, to the countries where the companies are operating. And clearly the UK . . . if that was done in reverse to us, that would just cause mayhem.”

February 22, 2023

A poll commissioned by OEUK found that a majority of Scottish people (59%) did not want to halt oil and gas exploration in the north sea, preferring to either extend oil and gas extraction or stick to forecasted closures.³²

OEUK CEO David Whitehouse said “This is an excellent vote of confidence in the people in this industry who work hard to produce the energy we need to power and heat our homes and businesses.”

February 10, 2023

In an interview published by EnergyVoice, OEUK CEO David Whitehouse argued that despite record global profits for oil and gas companies, operators in the north sea were struggling and would need help or the UK could risk importing the energy transition.³³

He said:

“Without continuing to attract investment, our supply chain will contract, and operators will move capital and expertise elsewhere. Under these circumstances, it’s hard to envisage a successful transition. We need to fix that”

January 19, 2023

In a piece published in World Oil, OEUK said “policymakes should choose their words carefully” in response to an announcement made by Keir Starmer at the World Econonic Forum summit in Davos 2023 that Labour will not continue to invest in north sea oil and gas.³⁴

Jenny Stanning, Offshore Energies UK’s external relations director, said:

“We all know that the UK must transition to low carbon energies as fast as possible. Our industry has pledged to work with the UK’s governments to reach net zero by 2050. But, in the three decades ‘till then, we will need gas and oil.”

January 10, 2023

In response to an announcement from the Scottish Government that it intends to prioritise the development of new renewables over continued oil and gas extraction in the north sea, an OEUK representative implied that ending reliance on oil and gas was unfeasible.³⁵

Jenny Stanning, OEUK’s external relations director, cited the UK’s dependence on fossil fuels and added “These plain facts means we will need gas and oil for decades to come.

“So we need to ensure that the final strategy acknowledges the continuing role of oil and gas in Scotland’s energy security and economy – as well as our sector’s role in a rapid transition to a low-carbon future.”

February 2, 2023

A DailyBusiness piece reported that OEUK’s head of sustainability, Mike Tholen said that calls from the Labour party were offering “misrepresentations.”³⁶

He said:

“The UK is subject to global tax agreements which say that it cannot tax profits made by companies outside of the UK.

The UK cannot then impose a second tax just because the group has its headquarters in the UK. If we did, they would all leave.

“It would be invidious for the UK to tax profits made in other countries too. The taxes on those revenues belong to the countries where they were generated.

“It would be wrong for another country’s revenues to be effectively seized by the UK.“Our leading politicians in all parties know very well how global tax law works and we would call on them to avoid these misrepresentations.”

December 14, 2022

In a piece published in World Oil, OEUK announced that it has appointed a new CEO, David Whitehouse “who has been a longstanding champion of OEUK,” taking over from former CEO Diedre Michie.³⁷

In the same piece a representative from OEUK argued that north sea oil and gas production is key to the UK’s energy security saying “The UK government’s British Energy Security Strategy made clear the need to support the production of North Sea oil and gas, alongside the deployment of offshore wind, solar and hydrogen. We support that strategy.”

January 4, 2022

In a promoted piece for Energy Voice, OGUK energy policy manager Will Webster advocated for the development of new oil and gas resources in the North Sea. Webster wrote that the UK was facing a “sharp reminder of the need to maintain and produce natural gas from our own North Sea resources” as gas prices reached record high prices. Webster also stated that “demand for gas in the UK” comes from more than 22 million households and that gas-fired power stations are “the backbone of the UK’s power system”.

Webster added that “the UK’s offshore oil and gas industry is also accelerating the greener technologies needed to achieve net zero, such as hydrogen, wind and carbon capture and storage,” but that “UK-sourced gas and oil remain critical to ensuring the UK’s lights don’t go out while we focus on scaling up those newer low carbon energies.”³⁸

December 8, 2021

In an opinion piece for Energy Voice, OGUK operations director Katy Heidenreich wrote that the oil and gas industry was “the nation’s best bet for building a green and low-carbon future”. Heidenreich added that the UK’s target to become carbon neutral by 2050 will not be achieved by ”shutting down our existing oil and gas fields or stopping new ones being developed”, claiming that this course of action “would have exactly the opposite effect”.³⁹

July 20, 2021

When asked about the oil and gas industry pushing ahead with new oil and gas developments despite the International Energy Agency’s (IEA) report that these projects will make it impossible to meet the goals of the Paris Agreement, OGUK’s Director of Sustainability Michael Tholen told DeSmog that the industry was “committed to achieve a net-zero future” but said the IEA report presented “one scenario of many which outline a potential pathway towards net zero”.

He added:

“In the UK, oil and gas will still be needed going forward, as the Climate Change Committee has pointed out, so it is right that we look to meet as much of this as possible through production of our domestic resources so we can stay in control of emissions.”

July 14, 2021

Speaking in support of the potential development of the Cambo oil and gas field off the coast of Shetland, OGUK Director of Sustainability told The National: “The UK offshore oil and gas industry is changing and applying low carbon thinking to all its projects, including the Shetland-based Cambo project, to support the transition to greener, cleaner energy.”⁴⁰

He added:

“Cutting investment in UK projects will do little to reduce demand, which would instead be met by resources produced in other countries with no jobs, taxes paid or support to our energy supply chain, building a renewable capability from a firm business base.”

June 3, 2021

OGUK CEO Deirdre Michie wrote an article for The Herald which advocated for the domestic production of oil and gas, contending that: “it makes no sense to stop producing oil and gas at home and start importing it from projects abroad where we have no control over emissions.”⁴¹

Commenting on the North Sea Transition Deal, which aims to reduce offshore production emissions by 10 percent by 2025 and 50 percent by 2030, Michie argued that: “Scotland is a key player here, and work is already under way to advance expertise in low-cost carbon capture and storage,” adding: “This involves repurposing legacy oil and gas fields to capture and store carbon, offering vast potential for clean energy production.”⁴²

April 12, 2021

In an op-ed for Energy Voice, OGUK Director of Sustainability Michael Tholen claimed that OGUK and the UK Government had, through the North Sea Transition Deal, found a “radical ‘middle way’ that ensures we can protect jobs in industrial heartlands, protect our energy security and protect our planet”.⁴³

Tholen also said that the Deal would “deliver a major acceleration in low-carbon energy technology to ensure the UK is net zero by 2050, whilst ensuring offshore oil and gas continues to power our homes, hospitals and the economy, in an increasingly environmentally friendly way”.

March 24, 2021

Speaking to BBC News, Michie commented on the government’s decision to continue new North Sea oil drilling, stating: “Ongoing exploration and production is compatible with net zero emissions – we’re pleased that the government has recognised this.”⁴⁴

March 17, 2021

In response to a Telegraph report about the government considering a ban on new exploration licences in the UK North Sea, OGUK’s Director of Sustainability Michael Tholen said that “any curtailment of activity by licensing constraints risks impeding the UK’s ability to deliver a net-zero future, damaging our domestic supply chain, and increasing energy imports whilst exporting the jobs and skills.”⁴⁵^, ⁴⁶

He added:

“The UK’s offshore oil and gas industry recognizes the urgent need for change and was one of the first sectors to commit to be a net-zero industry by 2050, setting demanding interim targets to halve its own emissions by 2030,” and that the industry could work with the government and the public to “help deliver the energy transition, providing the oil and gas the UK will need for decades to come while cutting the impact on the environment.”

February 18, 2021

In an interview with S&P Global about the recovery of the UK North Sea oil and gas industry after the COVID-19 pandemic, OGUK’s Director of Sustainability Michael Tholen said of the challenge presented to the industry by climate change and environmental campaigners: “The issue is how the production arm… and how the supply chain arm of our sector also adapts and transforms, and the question is how do we do that in a way that’s least damaging to the environment and most beneficial to the economy.”⁴⁷Archived July 28, 2021. Archive.ph URL: https://archive.ph/9GBND

Tholen said that he was “confident investment [in the industry] will pick up” after its struggles during the COVID-19 pandemic.

Tholen also noted that electrification of offshore facilities would be key for upcoming oil and gas developments in the North Sea, including developments off the coast of Shetland like Siccar Point Energy and Shell’s Cambo field. Tholen said: “I’m pretty convinced all the operators looking at new field developments West of Shetlands [sic] recognize they’re going to have to be — if not immediately already ready — then designed to flip over to electricity import to the platforms.”

December 3, 2020

Speaking to The Guardian, OGUK CEO Deirdre Michie criticised recommendations from the IPPR think tank to phase out North Sea oil and gas extraction as part of a strategy to achieve net zero carbon emissions by 2050.⁴⁸

Describing this policy as a “blunt instrument” with potentially “unintended consequences” for job retention in the oil and gas sector, Michie argued that: “You run the risk of investment stopping from the day you say it, not from the date of the deadline.” She added: “If there is a framework, and clarity of direction, it enables people to work out how they are going to get there rather than saying: ‘By that point, game over.’ The game would be over from the day that you say it.”

June 8, 2020

Speaking to BBC News about the impact of COVID-19 on companies and jobs in the oil and gas industry, OGUK CEO Dierdre Michie said:

“There is a serious risk the UK loses the skills it needs not only to meet existing energy demands from domestic resources, but also to meet the UK’s climate ambitions.”⁴⁹

2020

OGUK published a report outlining its targets for reaching net zero carbon emissions. While the report acknowledged that emissions from oil and gas were significantly larger than those from other sources, it stated: “it’s a fact that curtailing domestic production would only offshore the issue while increasing the UK’s reliance on imports, from potentially more intensive carbon sources adding to global emissions while shifting responsibility to others.”⁵⁰

2020

OGUK’s 2020 Economic Report disputed the ability of low-carbon technologies to effectively replace oil and gas. It stated: “New technologies such as electric vehicles, hydrogen and ground source heating pumps are now emerging to displace conventional solutions, however the pace of change is constrained by their cost and technological maturity.”⁵¹

The report also stated that “during the upcoming period of transition, oil will continue to have an important role in an increasingly diverse energy mix,” adding: “without this investment, domestic production will decline at a faster rate than demand.”

July 7, 2019

Speaking to The Times, Michie criticised calls to cease North Sea oil drilling, stating that: “It is not in anyone’s interests to portray the industry as the baddies when it can and needs to be a key partner to the UK’s net zero future.”⁵²

Describing the North Sea as a “world-class supply chain renowned for cutting-edge solutions,” Michie said: “Prematurely shutting down the North Sea would only increase our reliance on imports and jeopardise the benefits of an industry anchored here.”

March 20, 2018

Commenting on calls from the offshore wind industry for government support, Michie told The Telegraph that: “Oil and gas remain a vital part of the UK economy and will form most of our primary energy needs for many years to come,” adding: “The energy market is changing but we will remain relevant for many decades to come.”⁵³

October 2016

Michael Tholen, then OGUK’s Upstream Policy Director, argued that the UK needed to invest in its domestic fracking industry in the wake of Brexit.

Speaking to a House of Lords’ EU External Affairs Sub-Committee inquiry, Tholen said the government should develop a strategy for domestic shale gas extraction.

He said:

“The UK’s energy and regulatory policy are creating an opportunity to access the UK’s onshore oil and gas resources, and are still changing. And we may find those continue to diverge from Europe post-Brexit.”

According to its website, the following organisations are members of OGUK, among others:⁵⁴