From its inception, BRINDEX has significantly influenced the way in which the UK oil and gas industry has evolved. Key areas have included licensing policy and taxation.
Independent oil and gas exploration and production companies are at the heart of the liberalised global energy market which provides secure and diverse supplies at competitive prices. The independents will continue to play an important role in shaping a cost effective and imaginative approach to UK exploration and development and in securing the participation of the banking sector and the capital markets in its ongoing development.
Major oil companies were awarded the great majority of the highly prospective acreage on offer in the first four UK offshore Licensing Rounds. Subsequently, BRINDEX and its members lobbied to create an environment in which an independent oil and gas exploration sector could develop for the benefit of the country. We were successful in persuading successive UK governments of the vital role of the independent and, from the Fifth Round onwards, our success in terms of acreage awards rose dramatically. This resulted in a major deployment of British risk capital and debt finance and the new corporate vehicles for this funding went on to establish many joint-venture partnerships with major companies.
Whilst, in the main, the British independents were initially non-operators, the skill bases they built in operational, technical and commercial areas as well as in exploration, meant that a significant number have since become operators in their own right. Today BRINDEX members hold interests as operator in many countries around the world in addition to approximately 184 UK on and offshore licences.
The contribution of BRINDEX members to the UK oil and gas sector is common knowledge to the industry. Less well appreciated is the successful international expansion of BRINDEX members.
During 2016 BRINDEX members spent some £450 million on exploration and appraisal worldwide of which £370 million was outside the UK. Development and operating expenditure in 2016 totalled £1,750 million of which some £770 million was international. That overseas expansion is set to continue. The continued overseas growth of BRINDEX members' interests provides a valuable conduit for UK based suppliers and contractors to improve their international presence.
Within the UK, independent companies have an increasingly important role to play as the province continues to mature and BRINDEX continues to work with governments and the Oil & Gas Authority to improve the UK industry's competitiveness.