Labour’s proposed ban on awarding new North Sea oil and gas licenses has sent shockwaves through the industry, with major producers already feeling the impact. Three companies – Jersey Oil and Gas, Serica Energy, and Neo Energy – have announced a one-year delay in the start of oil production at the Buchan oilfield in the North Sea, citing uncertainty surrounding the upcoming election.
The decision to delay production at Buchan is directly linked to Labour’s energy policies, which include a ban on new licenses for oil and gas exploration. This move has raised concerns among industry players, with fears that other projects, such as Glendronach and Avalon, could also face delays.
Labour’s plan to create a state-owned energy company, Great British Energy, funded by increased windfall taxes on North Sea producers, has further rattled the industry. The proposal to raise the total tax level from 75% to 78% and strip away tax reliefs put in place by the current government has sparked criticism from industry bodies and trade unions.
The Conservative and Scottish National Party are campaigning against Labour’s energy policies, warning of job losses and economic consequences. Unite, the UK’s largest trade union, is urging Labour to reconsider its ban on new licenses until alternative job opportunities are in place.
With the industry seeking clarity and certainty, the upcoming election could have far-reaching implications for the future of North Sea oil and gas production. As Labour’s energy policies come under scrutiny, the debate over the balance between environmental concerns and economic interests is set to intensify.