King's Speech Must Support UK Offshore Energy, OEUK Warns

The King’s Speech must set out a path that supports the UK offshore energy industry, sector body Offshore Energies UK (OEUK) said in a release sent to Rigzone this week.
In the release, OEUK stated that the UK offshore energy industry expects the new Labour government to deliver on its commitment to work in partnership with industry as details of its program for government are published in the King’s Speech next week.
OEUK warned in the release that its member companies are “deeply concerned about the impact of proposals for a further windfall tax and an end to new oil and gas licenses”. The organization noted that the details of these proposals, alongside improvement to the regulatory and fiscal environment, will be key to achieving the full potential for the UK to deliver a homegrown energy transition.
“The new government says it has put partnership working at the heart of its agenda and we have welcomed that,” OEUK Chief Executive David Whitehouse said in the release.
“But we remain deeply concerned that some of the new proposals being put forward for our industry will undermine the very same homegrown energy transition we all want to deliver,” he added.
“Labour’s leadership has recognized that North Sea oil and gas will be with us for decades to come and they have committed to managing this strategic national asset in a way that does not jeopardize jobs. They now need to deliver on their commitment to support our industry and work in partnership with us,” he continued.
“Through working together with the sector, we can create the conditions which unlock investment, support our supply chain companies, underpin jobs, and grow the economy. The best path to this growth is through supporting our companies and people here in the UK,” Whitehouse went on to state.
The King’s Speech is the speech that the King reads out in the Lords Chamber on the occasion of the state opening of parliament, the UK Parliament website states, adding that it sets out the program of legislation that the government intend to pursue in the forthcoming parliamentary session.
The King reads out the speech, written by the government, from the throne in the House of Lords, the site notes. The state opening of parliament and the King’s Speech will take place on Wednesday, July 17.
In an oil macro update sent to Rigzone by the Rystad Energy team on Tuesday, Rystad’s Global Market Analysis Director Claudio Galimberti stated that Keir Starmer and the Labour Party’s “decisive victory on July 4 is poised to reshape the oil and gas sector with proposed tax reforms under the Energy Profits Levy (EPL)”.
“Labour plans include potentially raising the EPL rate by three percent and eliminating the EPL investment allowance (IA), which is crucial for stimulating development in the UK North Sea,” he added.
“These changes could impact investment and development activities, although they signal a potential boon for renewable energy investments under the party’s clean technology focus,” Galimberti continued.
Rigzone asked the Labour Party and the UK Department for Energy Security & Net Zero for comment on OEUK’s release and Rystad’s oil macro update. At the time of writing, neither organization has responded to Rigzone with comment yet.
During a recent event in Scotland, Starmer told attendees that his party is not turning off the oil and gas taps.
“I’ve been very, very clear when it comes to the transition, that we’re not turning off the taps,” Starmer said at the conference, which was streamed by the Scottish Labour Party.
“Oil and gas will be part of the mix for many years, we’re not revoking any licenses, but a transition is coming,” he added.
“Everybody knows the transition is coming. Everybody’s working towards that transition, the investment is already beginning in that transition. Thought is being given about … carbon capture and how the same skills and pipelines could be used,” Starmer continued.
Back in April, OEUK noted that a report published by Rystad “shows the oil and gas sector’s supply chain possesses between 60 percent to 80 percent of the capabilities required to develop the UK’s low carbon energies, but targeted investment is vital to capture the potential of an estimated GBP 150 billion [$194 billion] opportunity”.
The research was commissioned by OEUK, which outlined that the study “aims to set out a clear path to inform key stakeholders of the breadth and depth of the UK oil and gas supply chain, its capability and capacity, plus its transferability and critical role in delivering Floating Offshore Wind (FOW), Carbon Capture Storage (CCS), and Hydrogen”.
OEUK represents over 400 organizations involved in energy production from the seas around the Britain’s coast, the organization’s site states. Its members include gas, oil, wind, hydrogen and carbon capture specialists and a significant supply chain supporting projects across the sector, it adds.
To contact the author, email andreas.exarheas@rigzone.com
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