Oil production in the North Sea falls at the fastest rate in a decade

Sir Keir wants to make the UK a clean energy superpower. Credit: Peter Summers/Getty Images

David Whitehouse, chief executive of OEUK, said: “People want to see policy consistency, but it's clear that there is political uncertainty about next year's general election. This creates uncertainty among investors and is one of the reasons why we are not seeing much investment.”

Meanwhile, operators are also facing the consequences of a windfall tax, formally known as the Energy Tax. The «income tax» that was introduced by Prime Minister Rishi Sunak when he was Chancellor last year.

Oil and gas operator EnQuest said on Tuesday it posted an after-tax loss of $21.2 million in the first half of 2023 after an energy profit tax wiped out profits. The levy increased the overall average income tax rate for an energy company from 40 percent to 75 percent, but EnQuest said it kept the overall tax rate at 118 percent.

Mr Dornan said: «A competitive and predictable financial regime is fundamental to investors, but the changes since May 2022 significantly undermine their confidence in the UK and their ability to access finance.»

» While the principle recognizes a windfall tax in extraordinary circumstances, it is essential that the tax disappear along with the windfall if the UK is to ensure energy security, energy transition and economic growth.”

The report also warns that up to £100bn of private sector investment is needed for key offshore projects that will help protect the UK's energy security after Russia's invasion of Ukraine disrupted global energy supplies.

OEUK stated that spending on offshore energy could increase. reach £200bn this decade in oil and gas, offshore wind, carbon capture and storage and low-carbon hydrogen.

However, it says that about half of this amount is currently due to bureaucratic delays, and enterprises need to be updated. confidence in rejection.

Mr Whitehouse said: “In recent months, we have felt the direct impact of insufficient investment in domestic energy on job security for our workers, the competitiveness of our companies internationally and our future electricity bills.” .

“The UK doesn't have to be a good place to do an energy business, it has to be irresistible.”

The UK gets about 75% of its energy from oil and gas. The oil is mainly used to fuel the country's 32 million gasoline and diesel vehicles. Gas is used to heat 24 million homes and generate 40% of the UK's electricity.

Overall, the UK still produces about half of its own fossil fuels, but by 2030 this will fall to 20% without renewal investment. , the report says.

The loss of confidence in the UK means many companies are looking and moving to other countries. This includes an outflow of rigs used to create and seal oil and gas wells, the OEUK added.

Mr Dornan said: “Rigs are being actively sold from the UK to other regions around the world. , all the way to Australia.

“The North Sea is the only basin with an excess of drilling rigs. Once these units leave the UK, it is unlikely that they will return.”