The chief executive of trade body Offshore Energies UK (OEUK) has described pipeline oil and gas projects in the North Sea as “absolutely critical”.
According to David Whitehouse, investments are already leaving the UK and decline in the offshore oil and gas sector will only get worse.
Mr Whitehouse’s comments came in a podcast – Energy Voice (EV) Out Loud – for EV, sister publication to The Press and Journal.
The “critical” projects include Rosebank project west of Shetland.
Pending developments
Operator Equinor has yet to make a final investment decision on Rosebank amid concerns about the impact to industry of the energy profits levy, or “windfall tax”.
Another pending west of Shetland project, Cambo, is facing a similar hurdle.
Both developments are also vulnerable to a growing clamour from environmental campaigners and some politicians for an end to the exploitation of fossil fuels.
Mr Whitehouse said: “We are still going to see declines in oil and gas production in the UK, but we need to slow it down, otherwise we’ll truly find ourselves in a position where our energy security is undermined.”
He added: “We have in the region of 283 fields in the North Sea.
“The expectation is that over 150 of those will decommission and stop producing in the course of the next decade.”
Mr Whitehouse claimed that if the UK is not careful “we will find ourselves importing 80% of our oil and gas”.
Stuart Payne, chief executive of the North Sea Transition Authority (NSTA), the industry’s regulator, said recently the UK will continue to be a net importer of oil because of limited refining capacity. This will be the case even if new production comes on stream, he warned.
Will they or won’t they get approved?
Cambo’s majority owner, Aberdeen-based Ithaca Energy, confirmed recently the application for its development was on the desk of the Offshore Petroleum Regulator for Environment and Decommissioning (Opred).
An environmental statement is still with Opred and due to be sent to NSTA.
Ithaca chief executive Alan Bruce said: “It’s got to the point where there’s no more questions, but it is still with Opred as part of their approval process.”
Last year Opred warned Equinor its environmental statement for Rosebank “has not demonstrated” how it will meet the commitments of a pact signed by industry and the UK Government in 2021 to slash emissions.
But NSTA has said it has “full confidence” in data showing the industry is “on track” to reach its emissions reduction target by the end of this decade, and perhaps surpass it.
We are exporting our jobs and we are leaving the country poorer as a result.”
David Whitehouse, chief executive, Offshore Energies UK
This is all against a backdrop of the Labour Party reportedly planning to block all new licences in the North Sea if it wins the next general-election.
On a more positive note for the industry, Scottish Labour leader Anas Sarwar has insisted the party will “honour” Rosebank if approval is granted by the current government.
Oil and gas firms are struggling to justify continued investment in the UK, where the windfall tax claims 75% of profits.
Explaining why this is bad for cutting carbon emissions, Mr Whitehouse said profits companies need to make so they can invest in the energy transition are “disappearing”
He added: “The people and equipment we need for the energy transition, not only is that not there now for our oil and gas needs but it won’t be there in the future, when we start talking about floating offshore wind, hydrogen and carbon storage.”
And on new fossil fuel projects, he said: “Anything that we choose not to produce from Rosebank is effectively oil and gas that we import from elsewhere.
“We are importing from countries where they don’t necessarily have the same commitments to the climate goals that we have here. We are exporting our jobs and we are leaving the country poorer as a result.”
Labour leader’s latest words on oil
The podcast was recorded on June 2.
Since then, Labour Party leader Sir Keir Starmer has said oil will be part of economy for “decades to come”.
To hear more on the OEUK CEO’s views on Rosebank, Labour’s recent stance on oil and gas and other topics, listen to the Energy Voice Out Loud podcast.
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