Oil and gas leaders have warned banks that withdrawing financial support for exploration risks undermining the UK’s energy security.

HSBC said that continuing oil and gas production will be essential to global energy security but states that it will no longer provide upstream finance through lending or capital markets for the specific purpose of new oil and gas fields and related infrastructure.

Offshore Energies UK (OEUK), which represents 400 companies involved in producing energy from UK waters, in the form of oil, gas and offshore wind, said the UK got 75% of its total energy from oil and gas. 

It warned that the declining output from the UK’s existing fields meant continued exploration – and financing – were vital for the UK’s energy security.

Francesca Bell, OEUK’s senior investor relations adviser, said: “The UK government’s British Energy Security Strategy made clear the need to support the production of North Sea oil and gas, alongside the deployment of offshore wind, solar and hydrogen. 

“We support that strategy. At the moment our members produce nearly 40% of the nation’s gas. We can only maintain that kind of output by constant investment.

“We want to move to supplying low carbon energy. But that will need investment too. This is a multi-decade project.

“During those decades, energy security will be also key. The Ukraine confict and resulting energy shortages show that ongoing exploration in our waters is critical to ensuring reliable supplies of domestically produced energy in as clean away as possible. 

“The key point is that delivering UK energy is expensive – providing energy now and building the low carbon systems of the future will cost billions of pounds a year. That means support from the government and ongoing commitment from banks is essential. We want them to work with us, not against us. 

“If financial institutions withdraw support, then the UK’s energy security will be undermined, and the government will struggle to deliver a homegrown transition to cleaner energies.”

New OEUK CEO

Offshore Energies UK has appointed David Whitehouse as chief executive. Starting on 1 January 2023, he most recently led operator CNR International, where he spent two decades as managing director and vice president of development operations. Full story here