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The United Kingdom can produce half of its claimed demand for oil and gas under the country under the “proper business conditions”, reducing a growing confidence of more intensity imports of carbon, said an industry body.
UK offshore energy said the country is on the right track to produce 4bn oil barrels and equivalent gas of the 13BN-15bn forecast for use by the Independent Climate Change Committee in accordance with the Net Zero emissions path.
But the North Sea can produce other 2BN-3BN barrels if companies are encouraged to invest, adding £ 150 billion of economic value over £ 200 billion expected on current plans.
The OEUK forecast, issued in its annual business view of Tuesday, sets out the industry issue for prioritizing self-sufficiency on import dependence as the United Kingdom Government consults on future fiscal, regulatory and environmental regimes for the North Sea.
“The United Kingdom needs oil and gas – and we have to be focused on producing as much as possible,” said David Whitehouse, Chief Executive Oeuk. “It would require new projects to meet that objective, but most of them would come from existing licensed areas.”
OEUK wants an immediate reduction in wind tax to reflect lower prices and encourage investment in expensive North Sea drilling operations, said a person known for body opinion.
By 2030, the oil and gas sector will return to the payment of only permanent taxes, currently set approximately 40 percent, but would automatically contribute more if wholesale prices were to rise to unusual levels.
The tax on oil and gas profits was presented in 2022 in response to increased energy prices after Russia’s occupation in Ukraine.
Last year, the government increased the tax to 38 percent, bringing major taxes to producers to 78 percent by 2030, removing the main investment allowance.
“When the prices of the windfall fall, so should taxes,” the person said, mentioning that energy prices had fallen to the level of premium.
The government, accepting previous changes to the fiscal oil and gas regime, hopes to give more security to investors for future taxes.
The report highlights the “low historical rates of return” minus 1 percent for the year to June 2024, due to lower prices and production, along with high taxation.
OEUK also called on the government to “eliminate” the imports of liquid natural gas from mixing the UK consumption supporting more domestic production.
About 17 percent of the UK gas imports were emanated last year from the US LNG, which has a carbon intensity four times that of household gas.
The government has said it will not allow new oil and gas licenses, but will consider additional production around existing facilities. However, new licenses would be necessary to increase the results in his full potential, the person added.
Tessa Khan, executive director of UPLIFE, an organization that supports the fossil fuel phase, accused the oil and gas industry of “Peddling a Fantasy”.
“These production figures are only possible if the industry is given even more tax discounts, or prices are so high that it punishes ordinary people who can no longer afford their energy bills,” she said.
The new indoor production will “close us into an outdated and expensive energy source for much longer than needed,” she added.
Rachel Reeves, the Chancellor, told The Sun on Sunday that the development of Rosebank and Jackdaw Oil and Gasfields would go ahead, despite the legal challenges for environmental bases.
