Impact of Labour’s Energy Policies on North Sea Businesses | Business News

Labour’s Energy Policies Impacting Oil and Gas Companies

With the upcoming election potentially putting Labour in power, the party’s energy policies are already causing ripples in the business world. Three oil and gas companies – Jersey Oil and Gas, Serica Energy, and Neo Energy – have announced a one-year delay in the planned start of oil production at the Buchan oilfield in the North Sea. This decision was directly linked to the timing of the election.

Labour’s flagship energy policy, which includes a ‘green prosperity plan’ and the creation of a state-owned entity called Great British Energy, is causing concern among industry players. The party plans to raise windfall taxes on North Sea oil and gas producers, potentially increasing the total tax level from 75% to 78%.

The industry body Offshore Energies UK has warned that Labour’s plans could lead to the loss of 42,000 jobs in the sector. Additionally, Labour’s promise to award no new North Sea oil and gas licenses has further spooked companies like Jersey and its partners, impacting projects like Buchan, Glendronach, and Avalon.

The uncertainty surrounding Labour’s energy policies has made it challenging for companies to make strategic investments in the North Sea. Viaro Energy’s founder, Francesco Mazzagatti, highlighted the lack of predictability and plannability in the sector due to the proposed changes.

As the election approaches, both the Conservatives and the Scottish National Party are campaigning on the issue, while Unite, a major financial backer of Labour, is urging caution in banning new licenses until job loss mitigation strategies are in place. The industry is eagerly awaiting clarity on the future direction of energy policy.