The chief executive of BP has argued a windfall tax on North Sea operators could hurt investment and production of gas in the region.
Calls have been made for a levy to be imposed on oil and gas companies, such as BP and Shell, in light of huge profits enjoyed by the energy giants in the wake of strong commodity prices.
Meanwhile consumers are facing a hike in bills as regulator Ofgem announced that the energy price cap – a limit on the default tariff that can be charged on household energy bills – would rise by nearly £700 due to global issues affecting the price.
Shell chief executive Ben van Beurden has already said that he wasn’t convinced by the proposed levy, arguing that the problems are caused by regulatory changed which need to be updated.
In an investor call on Wednesday, BP CEO Bernard Looney gave his view on the issue.
He said: “We obviously have said what we feel this morning about that which is, if anything, the UK needs more gas not less gas right now and that’s going to require more investment, not less investment, and a windfall isn’t probably going to incentivise more investment.”
Mr Looney also pointed to a strategy update announced by BP today, which includes plans to spend double the amount of money it invests in the UK through to the middle of this decade.
He added: “What we need to do is help Britain transition.
“We also announced this morning that for every pound we make in the UK this decade, we will invest more than two pounds into the UK this decade (sic).
“The vast majority of that investment will be into the energy transition; offshore wind in Scotland, offshore wind in the Irish Sea, hydrogen power, hydrogen at Net Zero Teesside for power, our charging network, the list goes on and on.”
Clair South – the third phase extension to BP’s Clair oil field in the West of Shetland – is also anticipated for a final investment decision within that timeframe.
In its full-year results, BP posted pre-tax profits of $15.2bn (£11bn), reversing losses of $24.8bn in 2020, while revenues for its 2021 results totalled $157.7bn, up nearly 50% on the prior year.
It follows healthy figures for Shell last week, posting pre-tax earnings of nearly $30bn, reversing losses of almost $27 billion for 2020.
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