UK faces being ‘starved’ of North Sea power, warns Ithaca Energy boss
Labour plan to ban new licences and government taxation policy is harming investment says company chairman
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Your support makes all the difference.A leading oil and gas producer has warned the UK could be “starved” of North Sea energy under Labour energy plans.
Labour leader Sir Keir Starmer last week said the party would grant no licences to explore fresh fields in the North Sea, calling a wait until UK oil and gas runs outs a “historic mistake”.
But the executive chairman of Ithaca Energy, which has the bulk of its investment in the North Sea, has warned such a ban and existing taxation policy was putting off investors and threatened energy security.
Gilad Myerson told the BBC: “By a new government imagining they’ll be able to stop licences and oil development in the UK, ultimately what that means is that they’ll be starving the UK of energy, and it will become very dependent on energy from abroad.
It's impossible to just turn off a switch and imagine we can live in a world without hydrocarbons
“Politicians keep making statements which spook investors. You have to make sure that the environment is stable because this is a project that will last for 10 years.”
Environmental groups have warned new exploration in the area would see the UK exceed carbon budget limits.
Mr Myerson argued that using North Sea oil and gas domestically means a lower carbon footprint than foreign imports.
“Most of the hydrocarbons in the UK are developed and are produced for the UK market,” he said.
“Some of the oil will go to refineries abroad, but will ultimately make its way back to the UK.
“It’s impossible to just turn off a switch and imagine we can live in a world without hydrocarbons.”
The Energy Profits Levy, a windfall tax on energy company profits, was increased to 35 per cent in the Autumn Statement with the Treasury announcing this month it would remain in place until 2028 unless oil and gas prices fell for a sustained period.
Mr Myerson said the chances of such as drop were “extremely low” after changes in demand following Russia’s invasion of Ukraine.
“The taxation regime is changing constantly and it’s very difficult to invest huge amounts of capital when you don’t know what type of return you’ll be getting.”
He said Ithaca, which has stakes in six of the largest North Sea fields, was looking at investments in Europe and the US.