Offshore Energies UK (OEUK) the North Sea energy trade body, today held emergency talks with industry leaders to call for a new co-ordinated response to the escalating global energy crisis caused by the war in Iran.
The meeting comes as the UK government moves to relax sanctions on Russia imposed since the invasion of Ukraine, allowing the import of jet fuel and diesel from third countries.
OEUK is urging the immediate prioritisation of domestic energy production – that is North Sea oil and gas as well as renewables.
The lessons from Iran and Ukraine show that countries that produce their own energy are more resilient. The International Monetary Fund has predicted the UK will face the biggest hit to economic growth from the consequences of the Iran war of all the G7 nations, in part because of its dependence on record levels of imported energy.
Early introduction of the UK Treasury’s proposed Oil and Gas Price Mechanism (OGPM) alongside accelerated approval of the North Sea’s Rosebank and Jackdaw projects, would unlock £50bn of investment, helping boost North Sea oil and gas production from fewer than four billion barrels under the current regime, to over seven billion barrels between now and 2050.
This morning’s meeting was attended by executives from major energy companies active in the North Sea. The domestic offshore energy industry and its supply chain support more than 240,000 UK jobs and contributes £36 billion annually to the UK economy.
A presentation on the impact of the war in Iran was given by Professor Nick Butler, Visiting Professor at Kings College, London who previously served as Group Vice President for Strategy and Policy Development at BP p.l.c. and subsequently as Senior Policy Adviser to Prime Minister Gordon Brown.
Professor Butler set out the problems of higher inflation, increased borrowing, slower growth, weaker spending and investment, and worsening pressure on public finances as a result of the war.
He said: “We are the only country in the world that’s cutting back on its potential oil and gas production apart from Denmark. I cannot see the moral, economic or environmental reason for importing oil and gas when we can produce it ourselves. In the face of this current crisis we need to maximise production of every resource we have.”
David Whitehouse chief executive of OEUK said:
“The evidence we have heard at this morning’s meeting makes clearer than ever the need to prioritise homegrown energy over imports, and that includes our own oil and gas.
“The decision to relax sanctions to allow the import of jet fuel and diesel from third countries refining Russian crude is evidence that decades of poor policy decisions have undermined our energy security and industrial resilience. The government must support our own producers, industries, and workers.”
Professor Butler’s slides are available here
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