UK Oil Sector Welcomes Chancellor's New Measures

UK Oil Sector Welcomes Chancellor's New Measures
The UK oil and gas industry has welcomed new measures announced by the UK Chancellor of the Exchequer in his latest budget.

The UK oil and gas industry has welcomed new measures announced by the UK Chancellor of the Exchequer in his latest budget.

That’s according to industry body Oil & Gas UK (OGUK), which noted that close cooperation with the sector is essential to maximize its “world-leading expertise and assure a successful green energy transition”. OGUK said the combination of taxation and investment measures offers a potentially strong route to transition energy and employment ahead of the “much anticipated and crucial” North Sea Transition Deal that it is currently negotiating with the government.

“We welcome the measures around supporting green energy innovation set out by the Chancellor in his Budget Statement,” OGUK Chief Executive Deirdre Michie said in an organization statement.

“We look forward to engaging with his department on the review of Research & Development tax relief, which can be a key driver of success in the field of green technology. The investment towards the Aberdeen Energy Transition Zone, Global Underwater Hub and Hydrogen Hub in Anglesey are encouraging starts to this country’s journey to a low-carbon future that also supports climate goals, employment and energy security,” Michie added.

“Central to all of this is the North Sea Transition Deal reaffirmed by the Chancellor …. Having powered the country for over 50 years, the UK’s oil and gas sector’s energy expertise is crucial to developing the green innovation required to see the UK achieve net-zero emissions by 2050,” Michie went on to say.

“Designed properly, the Deal should be an exciting blueprint to meeting that goal, whilst creating tens of thousands of high-quality jobs and attracting billions of pounds of investment into parts of the country that need it most. We look forward to successfully implementing it in partnership with the Government and making the UK a global hub for green energy technology,” Michie continued.

As part of his latest budget, the chancellor pledged $37.6 million (GBP 27 million) for the Aberdeen Energy Transition Zone and $6.9 million (GBP 5 million) for the Global Underwater Hub in Scotland, which the government dubbed the first stage in delivering the North Sea Transition Deal. $6.6 million (GBP 4.8 million) was also promised to support the development of a demonstration hydrogen hub in Holyhead. A review of research and development tax reliefs will also be launched “to make sure the UK remains a competitive location for cutting-edge research”, the government stated.

Commenting on the funding for the Aberdeen Energy Transition Zone and Global Underwater Hub, Julia Derrick, an energy partner at Ashurst, said, “the funding being made available by the government towards implementing the energy transition in the UKCS may only be a small proportion of the scale of the funding and investment that will ultimately be required, but it is nonetheless a positive step”.

Neil Gordon, the chief executive of Subsea UK, said, “with this further, and very welcome, funding from the UK Government for the Global Underwater Hub, the industry and all stakeholders will deliver a sustainable institution with the necessary resources to significantly grow the UK’s underwater engineering capability and capacity, capitalizing on the opportunities in the energy transition and the blue economy”.

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