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The British government is expected to replace the oil and gas windfall “as soon as possible,” said a working group led by the company, warning the opportunity window to secure the future of the North Sea is “firmly fast”.
The Northern Sea Transitional Working Group, supported by the British Chambers of Commerce, said the ministers have chosen to “wait too long” with their decision to replace the withdrawal of “defective” energy profits in 2030.
The current effective tax rate of 78% on oil and gas profits was “display investment” and risked a drop in income for the Treasury, according to a report published on Monday.
The working group supported by the industry provided for a more proportionate regime which would predict predictable to the prices of hydrocarbons, thus supporting long -term investment In domestic gas to replace more imports with high intensity of liquefied natural gas.
The British government has opened a consultation On the post-2010 tax regime for oil and gas and its manifest commitment not to issue new exploratory drill permits.
The investigation of the working group on unions and supply chains has revealed “general concerns” about the future of the North Sea, calling on ministers to “act now to restore the confidence of investors” in the midst of fears for tens of thousands of jobs related to fossil fuel.
From 2030, the petroleum and gas sector will only amount to paying permanent taxes, currently fixed at around 40%, but would automatically contribute to more if wholesale prices increased to unusual levels.
The working group said that if a consensus was reached on the thresholds at which the higher taxes would be triggered, there was “no reasonable reason” to delay before 2030.
“There is no time to hang out,” said Philip Rycroft, president of the working group. “The speed is gasoline here – good companies are already voting with their feet.”
The report cited Apache’s decision to leave operations in the UK offshore, the merger of Shell and Equinor operations in the North Sea and employment cuts.
Anas Sarwar, Scottish Labor Manager, supported oil and interior gas as an engine of energy and energy security. He said that existing fields in the North Sea could produce “hundreds of billions of value”.
“Put frankly, if the choice is more expensive imports from despotic regimes like Russia or new oil and gas [from the North Sea]Then the answer must be oil and gas, “he said.
The working group also recommended a committee led by the Minister to manage the transition of oil and gas to commercially viable renewable energies.
The committee, including representatives of the Treasury, Scottish government and unions, called the North SEA Transition Authority, which regulates offshore energy, to develop a strategic plan by the end of this year, said Rycroft.
RYCROFT also called on the government to ensure industry that drilling in consent areas would be welcomed.
The Energy Department said it had already taken “rapid measures” to provide a fair transition to the North Sea, including investments in the offshore wind, hydrogen projects and carbon capture and storage.
Uplift, which camps against fossil fuels, said more taxes on drilling and the decline in oil and gas companies would not produce a just transition for workers.
“Allowing a new borehole would seriously undermine investors’ confidence in the government’s commitment to get away from oil and gas,” said Robert Palmer, deputy director of the increase.
“Ministers should consider this report as the oil and gas industry simply doing what it has always done: the lobby for lower taxes.”
