Labour’s plans to halt oil and gas development will starve the UK of energy and increase its dependence on imports, a leading oil and gas producer has warned.
Ithaca Energy has stakes in six of the ten largest oil and gas fields in the North Sea, where the Labour leadership plans to end new exploration.
Myerson’s statements come following last week’s speech by Labour leader Sir Keir Starmer, who argued it would be “historic mistake” to wait until UK oil and gas runs out.
“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,” Myerson said.
The energy chief suggested that by using domestically produced oil and gas, as opposed to importing it from abroad, the UK will lower its carbon footprint.
“Most of the hydrocarbons in the UK are developed and are produced for the UK market. Some of the oil will go to refineries abroad, but will ultimately make its way back to the UK,” Myerson added.
The UK can produce its own oil and gas and take responsibility for the carbon emissions or it will have to depend on imports, GMB union boss Gary Smith, who has been critical of Labour’s policies, has argued.
Speaking to GMB members earlier this month, Starmer admitted that “oil and gas are going to be part of the mix for decades to come, into the 2050s,” adding, however, that Labour intends to focus on developing green energy.
Starmer stressed that it was time to “seize the next generation of jobs in nuclear and renewables” across the country.
Opposition
Ithaca Energy has committed to invest in the Cambo and Rosebank fields, which are the two of the biggest undeveloped oil fields in the North Sea.Politicians and environmental groups have voiced opposition to both projects in the past, citing environmental concerns. The Rosebank field project, set to commence in 2024, has been under government review but hasn’t yet secured Whitehall’s approval.
Green Party MP Caroline Lucas will lead a debate in Parliament on Wednesday, urging the government to drop the Rosebank project.
Myerson said that political announcements from all sides had been “unhelpful” in securing investments.
“Politicians keep making statements which spook investors. They are saying they do want hydrocarbons, then they say that they don’t want hydrocarbons. When it comes to a project like Cambo and Rosebank, you need to make sure that the environment is stable because this is a project that will last for 10 years,” the Ithaca Energy chief said.
He added that Ithaca Energy is considering investing outside of the UK, including in Europe and the United States, which he called “more supportive” of oil and gas.
Myerson also discussed the uncertainty of the taxation regime for oil and gas companies in the UK. The Energy (Oil and Gas) Profits Levy, introduced by the government on May 26, 2022, was initially set at 25 percent. The rate was later increased to 35 percent and will apply until March 31, 2028.
“At the moment, 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,” Myerson said.
