How to uncork £200bn of primed investments tops bill at North Sea summit

Ways to unlock major North Sea investments was top of the agenda when industry and government got round the table in Aberdeen yesterday.

Industry regulator the North Sea Transition Authority (NSTA) hosted Graham Stuart, minister of state for energy security and net zero, to discuss a host of issues, including energy security, net zero, jobs.

Also in attendance at the North Sea Transition Forum, which sets the strategic direction of the oil and gas sector, were representatives from the Scottish Government and leading industry figures.

Delegates discussed ways of supporting multi-billion pound projects vital to the government’s overarching energy strategy.

© Shutterstock

Industry bosses also acknowledged Westminster’s move to build a price floor into the energy profits levy (EPL), more commonly known as the North Sea windfall tax.

Oil and gas chiefs have long argued that doing so would help to restore investor confidence, and spur spend in fresh projects and emissions reduction technologies.

Fiscal review upcoming

Looking ahead the NSTA has pledged to work with government and industry on an upcoming review of the oil and gas fiscal regime.

It is expected to give companies much-needed predictability, further supporting long-term investment in jobs and the UK’s security of supply.

Forum members heard that more than £200 billion could be spent on oil and gas, wind, carbon storage and hydrogen projects by 2030, decreasing the UK’s reliance on energy imports as part of an orderly transition to low carbon sources.

© Supplied by Kath Flannery / DCT

Stuart Payne, NSTA chief executive, said: “The North Sea remains the jewel in the crown of our country’s energy system. It provides abundant oil, gas, wind and hydrogen resources supported by a world-class supply chain which can integrate these assets, maximising their potential. This gives the UK a competitive advantage in the global race to secure investment for energy transition projects.

“Following today’s timely and productive conversation, I am confident that the NSTA, government and industry will find the right path, including through the fiscal review, to ensure that the UK seizes this opportunity to bolster its long-term energy security and accelerate to net zero.”

The NSTA is currently working with industry to progress more than 21 projects capable of producing 1.5bn barrels of oil and gas, while awards from the 33rd oil and gas licensing round are expected later this year.

Marking progress on the NSTD

The forum is also used to provide updates on the delivery of the North Sea Transition Deal, a kay pact charting the basin’s future and agreed in March 2021.

Through the deal, industry committed to halving emissions from its operations by 2030 and spending £16bn on carbon storage, hydrogen and platform electrification projects.

Strong early progress has been made, notes the NSTA, with emissions down 21.5% between 2018 and 2021.

Meanwhile flaring was cut in half from 2018-22 – and was 7% lower in the first quarter of 2023 than in Q1 2022.

Forum members also spoke about the need for swift action from government, industry and regulators, including on electrification, to ensure the 2030 emissions target is met.

Minister for Energy Security and Net Zero Graham Stuart said: “Oil and gas are essential to this country and will be for years to come as we transition to net zero.

“Today’s forum was focused on cutting emissions from the oil and gas sector while supporting jobs, growing the economy and boosting our energy security – so we are not forced to rely on expensive foreign imports.”