Kwasi Kwarteng has paid a visit to a major Shell conference hailing the firm’s UK spending plans, two weeks after the government announced a windfall tax on the industry.
The Business Secretary’s visit comes less than a fortnight after the UK Government announced the multi-year levy on the industry – much to the frustration of large factions of the sector, including Shell, for its lack of clarity on investment incentives for renewables.
It also comes a week after regulators approved the Shell Jackdaw gas field for development.
In a statement outlining his visit to the conference for thousands of Shell staff at an East London hotel, Kwarteng said he “welcome(s) Shell’s plans to invest up to £25bn in next generation North Sea energy technologies in the next 10 years”.
The windfall tax announced at the end of last month included a sizeable boost to investment incentives, but firms including Shell have highlighted that these “don’t extend to the renewable energy system we want to drive forward in the UK and invest in very substantially”.
Prior to the tax announcement, Shell said it intends to invest £20bn – £25bn over the next decade, around 75% of which is in clean and low carbon energy projects.
Kwarteng said: “We need to see industry stepping forward with clear plans for accelerating investment in both domestic production and in the clean energy technologies of tomorrow – and I welcome Shell’s plans to invest up to £25bn in next generation North Sea energy technologies in the next 10 years.
“We all need to demonstrate that production on the UK Continental Shelf will have a lasting benefit to the British economy – helping to secure jobs and livelihoods for the decades ahead.”
He also hailed Shell’s recent HQ move from The Hague to London as a “real vote of confidence in the British economy” and also highlighted the need not to “squander the resources we are blessed with in the North Sea”.
It was also used to reference the upcoming North Sea licensing round due to be announced in Autumn.
He outlined the history of the Samuel family which founded Shell, saying the firm will be an “industry leader” in clean energy production.
“It’s great to see the work Shell Renewables is doing in this area,” he said.
“But we are also very realistic about our energy right needs now. We will need oil and gas for decades to come while we transition to cheap, clean, home-grown energy.
“That’s why we want to ensure we don’t squander the resources we are blessed with in the North Sea because our oil and gas reserves will ensure our national security. We want to protect this important asset for many decades to come.”
Kwarteng referenced the British Energy Security Strategy launched in April, which is aimed at “creating more energy in the UK for the UK, in response to the crisis exacerbated the invasion of Ukraine.
As part of boosting North Sea production, he said that it is “only fair” that as he prepares to launch a licensing round this year, “companies who profit from our natural resources reinvest back into the UK”.
An earlier version of this piece said the conference took place at Shell’s London HQ. The event took place at an East London hotel for thousands of Shell staff.