World response needed to oil crisis: British PM
LONDON (AFP) - Britain on Wednesday gave the go-ahead for two new North Sea oil fields, as Prime Minister Gordon Brown warned the world faced a "great oil shock" fuelled in part by increased demand and tight supplies.
Business Secretary John Hutton said the fields some 150 kilometres (93 miles) northeast of the Shetland Islands, off northern Scotland, would peak at up to 50,000 barrels per day, with a total output of 50 million barrels.
He also outlined government plans for new oil and gas fields to be carved out of unprofitable parts of about 30 existing fields off Britain's coast, which could see 20,000 barrels a day added to daily production.
The announcement came as Brown and his finance minister Alistair Darling met heads of the Oil and Gas UK industry body in northeast Scotland to push for greater output from Britain's North Sea fields.
Afterwards, Brown said: "I met the oil producers today because we are facing the third great oil shock in decades."
Oil prices had shot up from about 10 dollars a barrel when he began as finance minister 11 years ago to more than 135 dollars this week, impacting on fuel and household energy prices as well as the cost of food, he said.
"We want to do more to increase production in the North Sea and we have made proposals today that I believe will incentivise not only existing fields but new fields to come on stream," he added.
It was also important to increase supplies worldwide, he said, vowing to put the creation of global strategy to secure a better balance between supply and demand at the top of the economic agenda at the forthcoming G8 summit in Japan.
But he warned the problem of supply and demand was "long-term".
Elsewhere, Brown wrote in The Guardian newspaper that there should be greater use of alternative energy sources to help promote market stability, and closer links between consumers and producing nations, particularly OPEC.
Oil and Gas UK chief executive Malcolm Webb said the talks with Brown and Darling were "a highly constructive engagement" and the proposals could have a "significant impact on the near-term production".
Some 37 billion barrels of oil and gas have been recovered from the North Sea, according to the trade body. Up to 25 billion barrels are thought to remain.
About 30 billion pounds (38 billion euros, 59 billion dollars) of investment is required over the next decade alone to recover the oil and gas planned, it added, but more than 17 billion pounds has not yet been secured.
Brown's comments came a day after hundreds of lorry drivers protested in London at rising fuel prices, which they say is driving them out of business, and amid widespread calls to cut a planned rise in road tax for "gas guzzling" cars.
A number of British newspapers Wednesday said the British government was preparing to water down its proposals on road tax and fuel duties in potentially the second U-turn on tax in as many months.
The demonstrations coincided with similar protests by truckers, farmers and fishermen in France, where a Total refinery was blockaded in the northern Normandy region, and elsewhere in western Europe.
French President Nicolas Sarkozy called Tuesday for a Europe-wide cut in fuel taxes to help those hardest hit by the price hike while Portugal's economy minister called for urgent EU talks on the matter.
This is a declaration of acknowledgment of "PEAK OIL" by British PM and a signal of change in the global scale. This year's oil production is set to be the lowest since the mid 1990s and output is widely expected to continue to dip in future years due to depletion of ageing North Sea oilfields
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