INEOS chairman: UK’s lack of energy policy is “completely irresponsible” as North Sea oil production rapidly declines
(WO) - The Forties Pipeline System moves 40% of the UK’s oil from the North Sea through Grangemouth where it is processed for distribution throughout the UK. Over the 6 years of INEOS ownership, oil flows through the system have declined by a dramatic 40%, and INEOS has had to close one of its three processing plants due to lack of demand.
This worrying decline is bad news for the UK, meaning that the country is becoming ever more reliant on imported oil and gas. It puts UK consumers at the mercy of foreign producers and causes massive volatility in prices, pushing yet more people into fuel poverty. The UK will also need domestic gas as a key feedstock for future hydrogen production. It also means that oil and gas revenues leave the UK and into the coffers of other countries.
The fundamental reason for this decline is the lack of investment in new fields caused by the UK government’s new windfall taxes, which are now so high there is no cash left for new oil and natural gas production. The problem is exacerbated by the mixed messages coming from UK politicians, which further undermine companies’ willingness to invest in the North Sea.
Sir Jim Ratcliffe, INEOS founder and chairman, is scathing about the whole situation. “The rest of the world has understood that we will need oil and gas for the next 30 years and is incentivizing production through sensible taxation. The UK is doing the opposite and seems intent on rapidly destroying North Sea production through a mixture of negative comments and punitive windfall taxes.”
“The UK’s total lack of an energy policy is completely irresponsible. Whilst the rest of the world is encouraging local oil and gas production, the UK seems intent on destroying it through high taxes and disincentives, making us totally reliant on overseas supplies and losing billions in potential revenue.”