The Urgent Call to Reshape the North Sea’s Future: Offshore Energies UK’s Plea to the Government

With the pressing need to steer the North Sea towards a low-carbon future while bolstering investments to ensure the UK’s energy security, Offshore Energies UK (OEUK), the trade body for the offshore energy industry, has issued a compelling plea to the government. The organization urges swift action on the Energy Profits Levy (EPL), commonly known as the windfall tax on oil and gas profits, by next year. This move is deemed crucial to safeguard jobs, enhance energy security, and pave the way for the development of future energy infrastructure.

Urging for Policy Change

OEUK advocates for the removal of the windfall tax on oil and gas profits by 2026, to be replaced with a competitive long-term mechanism that can effectively respond to future price shocks. The current tax rate of 78% remains in place despite a downturn in profits for companies operating in the UK’s oil and gas sector. This tax, introduced in response to a spike in global energy prices, is perceived as a barrier to essential investment across the country’s energy landscape.

The industry echoes OEUK’s sentiments, engaging constructively with the government and calling for a meaningful consultation on the implementation of a competitive system by 2026, earlier than the government’s proposed timeline of 2030.

Building a Sustainable Energy Future

David Whitehouse, Chief Executive of OEUK, emphasizes the importance of responsible oil and gas production alongside the expansion of renewable energy sources. He stresses the need for a holistic approach to energy generation, highlighting the significance of all energy forms working in synergy to meet the nation’s needs.

OEUK underscores the potential benefits of a pragmatic oil and gas tax regime, citing increased domestic energy production, job protection, and enhanced energy sovereignty as key outcomes. The organization urges the government to act swiftly, proposing the introduction of a new mechanism in 2026 to provide companies with long-term investment certainty.

A Path Towards Energy Independence

OEUK’s vision includes the development of a new national energy strategy that prioritizes home-produced energy. By placing domestic energy at the core of its strategies, the UK stands to attract substantial investments in offshore energies, supporting job growth and economic value creation.

The organization’s plan outlines a potential £200 billion investment in UK offshore energies over the next decade, benefiting various sectors including offshore wind, carbon capture, hydrogen, and oil and gas. By choosing homegrown energy over imports, the UK can align with its climate goals while bolstering economic growth and job creation.

Collaborative Efforts for a Sustainable Future

OEUK emphasizes the importance of collaboration between industry and government to drive down energy costs, protect sovereign capabilities, and achieve climate targets. By championing home-produced energy, the UK can secure its energy future while contributing to economic growth and environmental sustainability.

In conclusion, OEUK’s call to action underscores the critical need for policy changes to support the transition towards a sustainable energy future. By aligning government policies with industry needs, the UK can unlock its energy potential, create jobs, and bolster its energy security for generations to come.