Exclusively For Offshore Post: Declan is an internationally recognised journalist of more than two decades, having worked for the BBC and ABC News, focusing on all things business and global economics.

Declan Curry

A New Enterprising Era for North Sea Oil & Gas

Published at 09:11AM - 16/08/16

Despite all the oil & gas job losses and spending cuts of recent years, some experienced old hands think the North Sea may be about to enjoy a new golden age.

One of those sages is Algy Cluff. He was one of the early pioneers in the North Sea in the early 1970, creating an entirely new industry for Britain from scratch and liberating us from our debilitating reliance on foreign oil and gas.

“Those were heady days,” he told me. “Almost every well was a discovery.”

After 40 years away from the basin he’s now back in its southern waters, looking for gas off Lincolnshire and Norwich. He’s also keen to develop a different offshore industry for Britain: Underground Coal Gasification, which produces synthetic gas from undersea coal deposits.

North Sea Oil and Gas – A New Era

When he sat down with me for an interview for Offshore Post a few days ago, he was seized by the notion that the North Sea has a new entrepreneurial spirit about it. Yes, the big oil companies may have departed the area for simpler, cheaper prospects elsewhere.

But, he thinks, that merely creates opportunities for smaller companies such as his, which are willing to take the risks that the majors can no longer endure in an era of “lower for longer” oil prices. The future is brighter if the North Sea thinks small – when it comes to company size, at least.

Algy Cluff Talks Exclusively To Offshore Post About North Sea Oil & Gas
Algy Cluff Talks Exclusively To Offshore Post

He bubbled about the “exciting potential” in the southern reaches of the North Sea. “We believe there are substantial large gas fields to be discovered,” he told me. And he is ready to strike, planning to be ready to drill “by 2018, possibly 2017”.

He thinks this new swashbuckling spirit will be essential in safeguarding Britain’s future energy supplies. He has long argued that we should be more self-sufficient and less reliant on overseas sources of energy. Of course, in making this point he is talking up his own business.

But he is also of the generation that remembers life before the North Sea. He remembers the oil embargo after the Arab-Israeli War, the nationalisation of Britain’s oil industry in Iran, the critical importance of keeping the Suez Canal open for oil shipments – and the disastrous political and military adventures which flowed from that imperative.

Prime Minister May’s New North Sea Approach

So he approves of suggestions that the government of the new British Prime Minister Theresa May will adopt a more nationalistic energy policy. The Prime Minister, he says, wants a “proper energy mix, and that will involve … a new method of encouraging exploration in the North Sea.”

North Sea Oil & Gas Is Turned On By HM Queen Elizabeth In 1975
North Sea Oil Is Turned On By HM Queen Elizabeth In 1975

The first signal that change is afoot comes from a different part of the energy industry – electricity generation. Mrs May has stalled the planned new nuclear-power station at Hinkley Point in Somerset. That deal was done under the Government of her predecessor, David Cameron, and would have been part-financed by a company owned by the Chinese government.

Mrs May, well informed about Beijing’s cyber-hacking and industrial espionage from her spell as Home Secretary, is concerned about the security risks of relying on the Chinese government for anything as essential to everyday British life as energy.

Mr Cluff concurs. “She is absolutely right to introduce some common sense,” he told me. “I am very refreshed by the grip she is already taking. She is very much alive to the energy risk.”

Let Oil & Gas Exploration Companies Get On With It

Praising politicians doesn’t come naturally to him. In his half-century in the energy and mining industries, he has dealt with everyone from mad despots whom he feared were going to shoot him in the back, to hard-line Socialists determined to seize his businesses.

In our conversation, he dripped contempt about the former Chancellor, George Osborne. He described the energy policy of the Coalition Government as “deranged”. And he was deeply unhappy with the Scottish Government’s moratorium on his plans to make synthetic gas from coal deposits underneath the Firth of Forth. He called it a “double cross”, and hopes that ban will soon be lifted.

Mr Cluff argues that the current energy plan – Chinese-funded nuclear power and gas imported from some fairly unpleasant regimes – is an unnecessary risk with our energy security. He sees Britain as a solid lump of coal, floating on enough oil and gas to keep us warm, fed and lit for generations – but only if the politicians let the energy companies get on with it. He thinks the UK Government is finally listening to his argument.

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