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Yousaf urged to back oil and gas as investment falls

David Whitehouse: critical time

An oil and gas industry leader has urged new SNP leader Humza Yousaf to give investors greater certainty in the transition to net zero.

Mr Yousaf, who is due to be elected First Minister by parliament today, has spoken of a need to protect the region as it moves to cleaner energies.

But the SNP Government has previously called for presumption towards no further oil and gas exploration and a new report from Offshore Energies UK reveals a sharp decline in spending plans in the region.

David Whitehouse, CEO of Offshore Energies UK, said it was a “critical time” for businesses and people looking for energy security and stability in their everyday lives. 

“Energy policy is a big opportunity to drive high value jobs and growth for Scotland,” he said in a message congratulating Mr Yousaf on his election as SNP leader.

“Our rich heritage from oil and gas and Scotland’s supply chain puts us in a strong position to seize the opportunity. 

“So I’m looking forward to a highly collaborative relationship and building exciting new partnerships between government and industry for the good of Scotland and the wider UK. 

“Our new Business Outlook report… shows how we can lead the world if we nurture today’s homegrown energy production and give people certainty to carefully invest in tomorrow’s technologies and talent.’’

His comments coincide with the publication of a report warning that political uncertainty and high taxation are causing investors to turn away from the North Sea and jeopardising attempts to transition to net zero.

It said more than 90% of companies involved in exploration and production on the UK continental shelf have cut their spending. The the 35% energy profits levy, or windfall tax, is a key factor.

Industry leaders have also expressed concern about further penalties should Labour come to power and ramp up the tax.

David Whitehouse, the OEUK chief executive, said: “We’ve powered the UK’s homes and businesses and fuelled its economy for 50 years. Now we’re ready to power the future too with traditional fuels for now while building the low-carbon energy systems of the future.

“But that depends on moving back to a fair, balanced, and predictable tax regime.”

OEUK’s Business Outlook report, said projects equivalent to a year’s supply from the North Sea, about 500 million barrels of oil, had been stalled or shelved.

Last week it said importing energy cost the UK £117 billion in 2022, compared with £54 billion in the previous year.

OEUK wants a floor to be set on the energy profits levy so that the tax would only be payable when oil and gas prices rose above it.

The Prime Minister Rishi Sunak is expected to visit the north east this week amid expectations that the government is prepared to introduce such a measure and that it may also signal support for the carbon capture and storage project in the region.

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