UK Asks North Sea Oil and Gas Sector to Set out Plan to Reinvest Profits

Business minister Kwasi Kwarteng has written to the North Sea oil and gas industry asking it to set out a clear plan to reinvest its profits into British energy projects, his department said on Saturday.

Energy prices have hit record highs this year and big profits for energy producers have led to repeated calls from the opposition Labour Party for a windfall tax on producers of North Sea oil and gas to fund help for people struggling with energy bills. 

Earlier this month the government set out plans to scale up domestic sources of affordable, clean and secure energy, including a new licensing round for North Sea oil and gas. 

"In return for the UK Government’s ongoing support for the sector, the Prime Minister, the Chancellor and I want to see a very clear plan from the oil and gas industry to reinvest profits in the North Sea and, importantly, in the clean energy technologies of the future," Kwarteng wrote in his letter to the industry.

"At our next meeting in coming weeks, I would like you to set out how you will reinvest profits, double down on investments in the clean energy transition and importantly accelerate and maximise domestic oil and gas production."

Power and gas prices for millions of households rose 54% from April after regulator Ofgem increased its cap on the most widely used tariffs in the wake of wholesale global gas prices hitting record highs.

Since the new cap was set, global gas prices have risen further, following the Russia-Ukraine conflict.

"We need to collectively show the British people how the success of our offshore oil and gas sector has a direct and enduring benefit to the British economy and people’s jobs and livelihoods in order to protect the North Sea as a major UK energy asset for decades to come," Kwarteng wrote.