UK Could Soon Run Out of North Sea Power: CEO of Ithaca Energy
Under Labour’s proposed energy policies, a significant oil and gas producer has warned that the UK risked becoming “starved” of North Sea energy. Last week, Labour leader Sir Keir Starmer declared that his party would not issue permits to explore new fields in the North Sea, labelling it a “historic mistake” to wait until UK oil and gas runs out.
However, the CEO of Ithaca Energy, which invests primarily in the North Sea, cautioned against such a ban because current tax laws deter investors and jeopardize energy security.
According to Gilad Myerson, who spoke to the BBC, “If a new government imagines they will be able to stop licenses and oil production in the UK, it ultimately means that the UK is starving for energy and becoming very dependent on.” foreign energy sources.
It is impossible to simply flip a switch and envision living without hydrocarbons.
Politicians continue to say things that worry investors. This project will take ten years, so you must make sure the environment is stable.
Environmental organizations have cautioned that further exploration in the area could cause the UK to exceed its carbon budget.
Domestic use of North Sea oil and gas, according to Mr Myerson, has a lower carbon footprint than imports from other countries.
The majority of hydrocarbons produced in the UK are created and sold for the domestic market, he claimed.
Although some of the oil will go to foreign refineries, it will eventually return to the UK. It’s not possible to simply turn a switch and envision a world devoid of hydrocarbons.
In the autumn statement, the Energy Profits Levy, an unanticipated tax on the profits of energy companies, was raised to 35%. This month, the Treasury declared that barring a prolonged decline in oil and petrol prices, it would stay in place until 2028.
Given changes in demand as a result of Russia’s invasion of Ukraine, Mr. Myerson said it was “extremely remote” that there would be such a drop.
“The tax system is constantly changing, and investing large sums of money when you don’t know what kind of return you’re getting is very challenging.”
Ithaca, which holds interests in six of the largest North Sea fields, is reportedly considering making investments in the US and Europe.