How much could your business save?Find out now!
Or, you can call us on:0800 411 8830

Business gas: North Sea revenue at a record low


Scottish Government tax earnings from North Sea oil and gas dropped 75% to a record low in 1Q15, according to the latest figures. What does this mean for you?

Much of the current pain is due to low oil prices, which “will continue to have a material bearing on economic conditions in Scotland”, in the words of the latest State of the Economy report. As doubts over the Chinese economy have contributed to global economic fears, oil prices (which are closely related to gas prices) have slipped to around $40 a barrel.

Cheap business gas

For Scotland, low prices have both positive and negative impacts, as the report explains: “lower oil prices boost consumption as well as production in energy-intensive sectors, but squeeze investment and profitability in the oil and gas sector and the wider supply chain.”

Despite this attempt at a positive spin and the growing contribution of renewable energy, the importance of North Sea oil and gas to the Scottish economy (more pronounced if the country had voted to become independent) means the country will suffer in the short term unless commercial gas prices rebound.

A big part of the problem is the dwindling output of ageing North Sea oil and gas fields, squeezing earnings of business gas suppliers, just as expensive infrastructure reaches the end of its life.

Cost cutting, consolidation within the industry and a more collaborative approach championed by the new industry regulator, the Oil and Gas Authority (OGA), is helping. Indeed, a “particularly strong performance in the construction sector underpinned by infrastructure investment” is noted in the Government report.

That may already be bearing fruit: the report notes that the ONS Index of Production reports that UK oil and gas production in 2Q15 was up by 9% year-on-year: “Several factors were behind this, including production in some fields coming back online after closure for maintenance, and the high levels of North Sea investment in recent years resulting in new fields coming on-stream or ramping up production.”

Yet, as the Scottish Government themselves admit, “at this stage any specific impacts are difficult to quantify and will depend on this trend being maintained”.

Business gas rates

Business gas prices could be on a downward trend. But, with so much instability – including in important gas producing areas such as Russia and the Middle East – prices could quickly increase. Now is the time to lock in current low prices or at the very least see if a better deal is available.

This doesn’t have to be onerous: just 20 minutes is enough for us to quickly compare business gas suppliers and switch you to a new deal (with us taking care of the paperwork). Give us a call on 0330 0100 251 (or request a call back using our form).

Find out more about business gas at our dedicated page.

Related Articles

Powerlines-into-sunrise

The Week’s Energy News – 09/12/2016

This week’s energy news covers an acquisition and a host of renewable energy stories. Drax buys Opus Energy ...

Read More
the state of renewable energy

The state of renewable energy – infographic

Renewables are big business, and are increasingly viewed as commercially viable, as well as kinder to the envi...

Read More
the week's energy news

The Week’s Top Energy News – 02/12/2016

The Christmas season has well and truly begun and, in true business style, you’ll either be incredibly b...

Read More
Excellent, 9.6 / 10

Excellent Service

"Many thanks to Anthony Pendleton, very courteous and polite, explained everything in right amount of detail and very helpful in sorting out the business utility switch. Would thoroughly recommend."

This review was posted by Nicola on the 28th of November 2016

Switch Electric

"Rachael Grindrod was excellent, very friendly and helpful."

This review was posted by Maria Allen on the 29th of November 2016

Uswitch electric

"Thanks to Jonathon Burgess who was a great help switching electricity for a charitable organisation. The process was complicated and his patience was appreciated as well as his proffesional attitude. We would not have completed the process without his help. Thanks Dawn"

This review was posted by Dawn Kerr on the 29th of November 2016

Great service from Rachel Grindrod. Thanks.

"Great service Rachel"

This review was posted by Craig Hewett on the 30th of November 2016

Easy to Switch

"Using SwitchMyBusiness made changing electricity suppliers easy. Thank you Anthony Pendleton for your professional approach with advising on which supplier to use."

This review was posted by Vanessa Gernat on the 01st of December 2016