Oil and Gas Sector Warns Labour Energy Policies Could Hamper Investment

The oil and gas sector in the UK is facing significant challenges due to uncertainty over licensing and taxation policies. Industry body OEUK has expressed concerns about Labour's plans to end new license issuances and increase the windfall tax, which could make the UK "uninvestable." To attract investment, OEUK emphasizes the need for stability, predictability, and fair returns.

Oil and Gas Industry Expresses Concerns Over Labor's Energy Policies, Citing Investment Chill

London-based industry body Offshore Energies UK (OEUK) has raised concerns over the potential impact of the Labour party's proposed energy policies on the United Kingdom's oil and gas sector. OEUK's marketing intelligence manager, Ross Dornan, highlighted the industry's challenges with licensing and taxation, emphasizing the uncertainty surrounding future licensing policies and the prospect of tax increases under a Labour government.

Dornan emphasized that the industry faces a complex investment environment due to multiple challenges, including the potential for changes in taxation and labor policy. He expressed particular concern over Labour's pledges to retain and expand the windfall tax, which he believes would make the UK "uninvestable" from several perspectives.

In a report released by OEUK, the industry body estimated potential investments in the energy sector of up to £450 billion by 2040. However, OEUK's chief executive, David Whitehouse, stressed that investors require stability, predictability, and fair returns to drive these investments. Whitehouse emphasized the need for supportive long-term policies, a stable tax regime, and responsible rhetoric to foster investment in the energy sector.

The industry body's concerns come amidst a global race for investment, with Whitehouse highlighting the importance of making the most of the UK's oil and gas production, which is currently at record lows. He emphasized the potential for the UK to become reliant on imported energy and outsourcing supply chain companies due to a lack of appropriate domestic investment.

OEUK has engaged in emergency meetings with Labour representatives in recent months to convey industry concerns regarding Labour's policy proposals. Dornan reiterated the industry's need for "stability, predictability, and competitiveness across the board."

Meanwhile, a Labour spokesperson defended the party's energy policies, stating that the current Conservative government has failed to meet its clean power targets and has hindered investment in renewable energy. Labour outlined its plans to increase the rate of the windfall tax and eliminate investment allowances, maintaining that these changes would be proportionate and fair while generating revenue for the government.

The Labour party emphasized its intention to work with the industry to support its ambitions for the UK's energy sector and create jobs. Labour's "GB Energy" plan aims to reduce energy bills and foster job creation.

In response, Energy Security Secretary Claire Coutinho criticized Labour's energy policies, stating that they would undermine the UK's energy security and result in job losses and reduced investment. Coutinho highlighted Labour's unfunded spending promises and questioned their ability to pay for their proposed policies.

Coutinho asserted that only the Conservative government has a pragmatic and responsible plan to achieve net zero emissions while supporting economic growth. The government's plan emphasizes sticking to established goals and avoiding unnecessary financial burdens on families.