OEUK Urges Chancellor to Back UK Offshore Energy in Autumn Statement

In a statement posted on its website, industry body Offshore Energies UK (OEUK) urged the UK Chancellor of the Exchequer to use the impending Autumn Statement “to back the UK’s homegrown offshore energy sector and make the UK an irresistible place for energy investment”.

The statement described North Sea oil and gas as a strategic economic asset that has provided a national dividend through energy and economic security for the last 60 years. It added that the North Sea and its expert workforce can continue to power the country for decades to come.

“We recognize that the demands on the Exchequer are challenging,” OEUK CEO David Whitehouse said in the statement.

“Unlocking economic growth is the solution, and building on industrial strengths is key to our path forward,” he added.

Whitehouse noted in the statement that the North Sea is a strategic national asset and must be treated as such.

“Our homegrown offshore energy sector has powered the UK for the past 60 years, and the sector’s firms and skilled people are critical to our energy future as drivers of economic growth,” he said.

“We welcome steps to accelerate the deployment of renewable energy, and the recognition that we will use oil and gas for decades to come,” he added.

“Windfall taxes extended on oil and gas producers when no windfall exists deter the very investment that we need across our energy transition. While we use oil and gas, we must surely prioritize investment in our homegrown production, value in our economy, and our jobs,” he continued.

“In the past 100 days, it has been good to see the engagement of our new government with the proud and innovative workers and firms in our offshore energy industry. The government has heard from people across the sector, and now decisions will be made,” Whitehouse went on to state.

The OEUK CEO said the Autumn Statement will be a marker.

“We are in a global race for energy investment. Let us choose the path that encourages and attracts it, to build on our national strengths, so the whole of the UK can win,” he added.

OEUK’s statement also highlighted analysis by the organization on the Energy Profits Levy (EPL) published last month.  

In a release sent to Rigzone in September, OEUK announced that it had released data “which models the impact of the government’s announced stronger Energy Profits Levy on the UK economy”.

The modeling shows that the government’s proposed fiscal policy would generate a loss in economic value of around GBP 13 billion ($17.0 billion) compared to the economic contribution generated under the current windfall tax regime, OEUK noted in the release, highlighting that it has already shown the figures to HMT.

Rigzone previously contacted HMT and the UK Department for Energy Security and Net Zero (DESNZ) for comment on that OEUK release.

In response, an HMT spokesperson told Rigzone, “we are committed to maintaining a constructive dialogue with the oil and gas sector to finalize changes to strengthen the windfall tax, ensuring a phased and responsible transition for the North Sea”.

"Our plans for a new National Wealth Fund and Great British Energy will create thousands of new jobs in the industries of the future,” the spokesperson added.

DESNZ did not respond to that Rigzone request. 

OEUK’s latest statement also highlighted a recent letter from 46 supply chain companies to the government.

In a statement posted on its site back in August, OEUK noted that, in an open letter, more than 40 organizations said the confirmed three percent increase to the EPL to take the headline rate to 78 percent, extension to 2030, and the removal of the investment allowance and a reduction in capital allowances risks thousands of jobs, and the companies critical to the UK government’s industrial strategy, and progress towards its net zero targets.  

Rigzone contacted HMT and DESNZ for comment on OEUK’s latest statement and the statement posted on OEUK’s site in August.

In response, an HMT spokesperson told Rigzone, “we are making the UK a clean energy superpower with GBP 24 billion ($31.1 billion) raised for green industries at this month’s investment summit, and it is right that the oil and gas sector contributes to this transition by helping to fund Great British Energy”.

“We are working closely with the industry to ensure a stable investment environment while developing a successor regime to the temporary Energy Profits Levy, helping to secure the sector’s role in the UK’s energy mix,” the spokesperson added.

At the time of writing, DESNZ has not yet responded to Rigzone’s latest request.

The UK parliament website states that the Chancellor of the Exchequer will present her 2024 Autumn Budget to Parliament on October 30. Once the Chancellor finishes her statement, the Office for Budget Responsibility (OBR) will publish updated forecasts in its economic and fiscal outlook, the site adds.

The budget is a statement made by the Chancellor to MPs in the House of Commons, presenting the government’s plans for the economy, including changes to taxation and spending, the UK Parliament website highlights.

Rachel Reeves was appointed Chancellor of the Exchequer on July 5, 2024, the UK government website shows.

To contact the author, email andreas.exarheas@rigzone.com