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North Sea: Decarbonisation key to ‘really good’ transition deal

North Sea deal

Business Secretary Kwasi Kwarteng has said he is “hopeful” a North Sea transition deal with the oil and gas sector can be agreed this year.

The Cabinet minister told MPs a “really good deal” is still possible, if the industry is willing to “accept the need for decarbonisation”.

UK oil industry chiefs submitted proposals for a “sector deal” to Westminster in March 2018, estimating total investment of £176 million could deliver £110bn for the UK economy by 2035.

Parts of the industry’s wish list were fulfilled, including the creation of a national decommissioning centre, but a sector deal in name was never granted.

North Sea deal
Kwasi Kwarteng says a “really good” North Sea deal is achievable.

Future carbon footprints

Last year the industry revised its proposals to better reflect the role it can play in the UK’s crusade to achieve net-zero emissions by 2050.

In its white paper, the government said it had supported the oil and gas industry’s “bounceback” from Covid-19.

But it warned that a return to “business as usual” is “no longer an option”, in light of its legally binding net-zero target and the pressure oil companies have come under to shrink their carbon footprints from both investors and environmental groups.

Westminster said its continued support for the oil and gas industry would be “in the context of delivering net zero”.

Mr Kwarteng, in response to a question from Aberdeen South MP Stephen Flynn, said: “I was very much in favour of bringing forward the completion of the deal and I’m hopeful that we can manage to reach a really good deal where the sector accepts the need for decarbonisation very quickly.”

The comments came after Mr Flynn called on the Business Secretary to negotiate a “grace period” with the EU for Scottish exports, which have been hit by border delays in recent weeks.

Stephen Flynn has called for a “grace period” over trade with the EU.

Mr Kwarteng responded saying “the Brexit debate is over”, adding: “The business leaders I’ve spoken to have been extremely grateful for the fact that we got a deal, which he and others opposed.

“I think we’re moving forward with an active plan, active engagement with the economy, £280 billion that has been proffered so far and this is a picture that he fails to recognise.”

Following the exchange, Mr Flynn said: “You really have to wonder how dire the situation has to get before the UK Government takes action and does the right thing by businesses.

Stephen Flynn: ‘No matter where you look in the city there are people losing jobs’

“A grace period on Brexit checks for Scottish firms would provide relief from the utter chaos that we have at the moment with exports to the EU collapsing and nowhere near enough customs staff in place.”

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