Bad news for the UK
This worrying decline is bad news for the UK, as it means that the country is becoming ever more reliant on imported oil and gas. It puts UK consumers at the mercy of foreign producers and causes massive volatility in prices, pushing yet more people into fuel poverty. The country will need UK gas as a key feedstock for future hydrogen production. It also means that oil and gas revenues will leave the UK and go into the coffers of other countries.
The fundamental reason for this decline is the lack of investment in new fields caused by the UK Government’s new windfall taxes, which are now so high there is no cash left for new production. The problem is exacerbated by the mixed messages coming from UK politicians which further undermine companies’ willingness to invest in the North Sea.
Sir Jim Ratcliffe, INEOS founder and chairman is scathing about the whole situation: “The UK’s total lack of an energy policy is completely irresponsible.The rest of the world has understood that we will need oil and gas for the next 30 years and is incentivising production through sensible taxation. The UK is doing the opposite and seems intent on rapidly destroying North Sea production through a mixture of negative comments and punitive windfall taxes, making us totally reliant on overseas supplies and losing billions in potential revenue.”