As the UK government plans to award North Sea oil and gas licences every year, Energy Voice discusses what that means for the industry.
Europe editor, Allister Thomas, and print features lead, Ryan Duff, sat down to discuss if this proposed legislation is just “political posturing” or if it could provide stability to the country’s oil and gas companies.
“Let’s be clear, this is politicking ahead of a general election. It’s a bill set up by the Tories that Labour, if they win as polled to do, will shut down and it’s creating that dividing line,” said Thomas.
Ryan Duff pointed to news from earlier this year that Keir Starmer’s Labour would stop all new oil and gas licences in the North Sea if it were to win he next election, however, he conceded that the party has “rolled that back a little bit.”
“It doesn’t matter how often you say ‘you can win acreage’, if there’s not that financial regime around it to make it make sense, I don’t think it’s going to happen or it’s not going to be a successful as the Tories want to make you think.”
‘It’s all show’ vs ‘a welcome step from the UK Government’
Opinions have been divided on the news as Offshore Energies UK (OEUK) chief executive, David Whitehouse, said: “The UK needs the churn of new licences to manage production decline in line with our maturing basin.”
Mr Whitehous also argued that the move would support UK jobs and energy security.
However, Energy Voice readers have been less welcoming to the news.
John MacAskill, global managing director of renewables for ABL Group, shared his view that this was a political move. He agreed that the conservative party are looking to introduce a policy that the potential next Labour government will remove.
He wrote: “I see little future appetite for future licences in a) a rapidly declining basin and 2) in a regime that is tax-wise, one of the most volatile and politically uncertain.
“I would not be investing in it. Plus all the evidence shows it will not make a dent in gas imports. It’s all show.”
Tessa Khan, founder and executive director of Uplift, also took to Twitter to share her views on the matter.
Ms Khan wrote: “Let’s be clear that the headline announcement is pure political posturing.
“There have been annual licensing rounds for most of the past decade & there’s currently nothing stopping the North Sea Transition Authority, the body in charge of licensing, from holding annual rounds”
Ryan Crighton, policy director at the Aberdeen and Grampian Chamber of Commerce, shared the views of David Whitehouse as he showed his support for the policy.
Mr Crighton said: “This is a welcome step from the UK Government, as it is an irrefutable fact that we will still need oil and gas in our energy mix all the way out to 2050 and beyond, albeit in decreasing amounts.”