Sunak’s North Sea oil announcement.

What follows is a summary of the key points from Ed Conway’s recent Substack at:

Why does Britain export 80% of its oil? - by Ed Conway (substack.com)

[I recommend subscribing to Ed’s Substack – Material World]

·         In August 2023, Rishi Sunak said he was backing more exploration of North Sea oil – but negotiations with oil companies were already ongoing, so nothing was new.

·         The North Sea is a ‘mature, declining basin’ – energy independence for the UK from this area alone will not take place.

·         In 2022, the UK consumed 54 million tonnes of oil; it extracted 38 billion tonnes – so the UK is a net oil importer.

·         Yet, 80% of the oil produced by the UK is exported. Why?

·         There are many varieties of crude oil, varying in viscosity, level of impurity, and amounts of sulphur contained within them.

·         Refineries are set up to process certain specific types of oil – the UK’s refineries are designed to process Libyan and Norwegian oil, which is low in sulphur.

·         UK oil is largely rich in sulphur, and so cannot be processed here - it is mostly processed overseas in areas such as Southeast Asia.

·         UK oil refineries also operate well with shale oil, from the USA amongst other places.

·         Oil from the newer British fields such as Cambo, off the Shetlands, is very heavy and very viscous - it must be heated to travel through pipelines from the field. It is not compatible with UK refineries.

·         In short, Sunak is selling a myth – the UK’s energy security is not being improved.