UK offshore oil and gas trade group “deeply concerned” about new government's windfall tax, licensing plans

July 05, 2024

(WO) –  Offshore Energies UK (OEUK) has congratulated Sir Keir Starmer on this morning’s General Election result, with the representative body expected to formally acknowledge this in engagements with the new government in the coming days.

OEUK said it is committed to working with the new government on the next steps to a homegrown energy transition, to safeguard energy security, jobs and skills and create an irresistible investment environment here in the UK.

However, OEUK warned many of the industry’s skilled people and investors remain deeply concerned about Labour proposals for a further windfall tax on homegrown oil and gas production and to end new oil and gas licenses in UK waters. OEUK says such measures would not create the investment conditions the UK needs to deliver the homegrown energy transition needed to kickstart economic growth.

The UK offshore energy industry is set to invest £200bn over the next decade in domestic energy projects. OEUK said today that the jobs and secure homegrown energy offered by the UK’s unique mix of oil and gas, wind, hydrogen and carbon capture technologies offer an exciting future, but the industry needs renewed confidence in order to invest.

More than 200,000 jobs across the country are currently supported by domestic oil and gas production, wind, hydrogen, and carbon capture technologies.

David Whitehouse Chief Executive of OEUK said, “Homegrown offshore energy is a jewel in the UK’s industrial crown that government must treasure.

“The Labour party has put economic growth at the heart of its plans, and our offshore energy sector can deliver just that. UK offshore energy companies could invest £200 billion in homegrown energy production this decade alone in carbon storage, hydrogen, and wind opportunities alongside the homegrown oil and gas we all need.”

“The people in our sector and investors remain deeply concerned over Labour proposals to impose a further windfall tax and end new licenses. These policies, if poorly managed, and without industry input will threaten jobs and undermine the decarbonization of the UK economy. The details matter.

“Labour leadership has recognized that North Sea oil and gas will be with us for decades to come and committed to managing this strategic national asset in a way that does not jeopardize jobs. The transition is estimated to cost £1.4trillion, the lion’s share of which will need to come from the private sector. Working together, we need to create the conditions to unlock this investment.

“We need the new Labour government to follow through on assurances to work in partnership with the sector, listen to our skilled people, and ensure no one is left behind in the UK’s energy transition.”

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