Oil and gas veteran Algy Cluff has hit out at the UK government claiming its energy policy in recent years has delivered “grave threats” to Britain’s energy security.
The chief executive and founder of Cluff Natural resources (CNR) said there has been a “lack of coherence” in government policy since 2008 when former Labour leader Ed Milliband was energy minister through a series of coalition energy ministers that Mr Cluff said was “depressing”.
The Scottish Government, whose moratorium on unconventional energy has hit CNR’s bottom line – also came under fire in Mr Cluff’s statement accompanying the firm’s annual results yesterday.
He said the closure of Longannet, Scotland’s last remaining coal fired power station made “a mockery” of the Scottish Government’s energy policy, due to the moratorium on fracking and underground coal gasification (UGC). CNR said it has had to “shift away” from plans to exploit nine UCG licenses across England, Scotland and Wales.
Instead, Mr Cluff hailed the “strategic importance” of the North Sea, where Mr Cluff has recently agreed a deal to buy rights to 100million barrels of oil and gas for just £1.
CNR confirmed an agreement buy an initial 5% stake in two Parkmead-operated assets from Verus Petroleum would go ahead on Tuesday. Yesterday the company added that it had further options to up its stake in the licenses, and that if it pressed ahead with these it would be “a transformational step” for CNR.
CNR said a report has estimated the value of its current North Sea offshore assets as having 140million barrels of oil equivalent. If the full deal with Verus goes ahead, the company said it will have 240million barrels “if the options are exercised”.
CNR’s pretax loss widened due to a £336,790 impairment charge on the value of its UCG assets.
The company made a loss of £1.9million in the year to the end of December, from £1.7million in 2014.
Mr Cluff said: “The North Sea not only continues to be of strategic importance to the UK but also compares favourably with most of the world, boasting a market, an infrastructure and a Government, on the whole, determined to sustain activity.
“Since my last statement the natural resources sector has continued to be buffeted by economic and political anxiety. Although this febrile atmosphere shows little immediate sign of recovery it is our considered judgement that this will prove to be a time of opportunity for expansion.
“Government however is not always entirely aligned with industry and it has been depressing to observe the lack of coherence which has existed in policy since Ed Miliband became the Energy Secretary, a condition aggravated by the two Coalition Energy Ministers and which is culminating in grave threats to our country’s energy stability.
“We considered that underground offshore coal gasification could make a significant future contribution to the energy equation by converting billion of tonnes of offshore coal into gas. “However these aspirations have not been endorsed by Government which prefers to place its primary hopes on the delivery of onshore shale together with questionable (and heavily subsidised) renewables.
“Longannet, which was the last remaining coal fired power station in Scotland, has now closed and makes a mockery of the Scottish Nationalist Party’s energy policy where they have even imposed, at this critical time, a moratorium on both shale gas and underground coal gasification.
“We have therefore determined to advance our portfolio of conventional oil and gas assets in the UK North Sea where we are convinced there remain significant discoveries to be made.”