Prime Minister Andy Burnham is expected to give the go-ahead in early August for the long-awaited drilling of oil and gas developments in the North Sea.
Miatta Fahnbulleh, new Secretary of State for Energy Security and Net Zero, was in Aberdeen having discussions with industry leaders about whether to give the green light to drilling at Rosebank and Jackdaw, 150 miles off Aberdeen.
Insiders expect a decision to be made in August which would allow production to begin by October. It will be welcome boost for the industry, and a popular move in the North-East where Douglas Lumsden, a Conservative, won a surprise byelection standing on a platform of exploiting the remaining hydro carbons in the ageing UK basin.
Such a move in bringing ashore the oil will allow the new Prime Minister to help bring down winter fuel bills and ease the cost of living. The backdrop to the decision is the continuing conflict in the Middle East and the Strait of Hormuz, where Iran and the United States have continued to exchange attacks on infrastructure. The price of a barrel of oil has reached $100.
There are growing fears over winter gas supplies as prices has risen again.
The final decision will be made by Miatta Fahnbulleh who heard energy voices in the oil capital yesterday.
David Whitehouse CEO of Offshore Energies UK, representing the industry, said: “I welcomed Miatta Fahnbulleh, our new Secretary of State for Energy Security and Net Zero. It was an important signal that her first visit in the role was to Aberdeen, recognising the central role this city and its workforce continue to play in delivering our energy future.
“We had a constructive discussion about the UK’s energy future and the need for a pragmatic approach to the transition. We spoke about the importance of homegrown energy of all types, continuing at pace with the build-out of renewable energy while also recognising the continuing important role that North Sea oil and gas will play in the UK’s energy mix for the foreseeable future. That clarity is helpful.
“What was also clear from the discussion is that this is about more than energy. It is about economic development, industrial capability and ensuring the industries and jobs of the future are built here in the UK. That means creating lasting opportunities and delivering real economic benefits for communities in Aberdeen and across the country.
He said he wished the Secretary of State success and made said he wanted the sector to be a constructive partner.
“We do not agree on everything, but we share a common purpose: delivering the energy, jobs and investment the UK needs. There is much work to do, but also a real opportunity. By valuing the industries we have today, we can build the industries of tomorrow and create an energy future that supports jobs, investment and growth right across the United Kingdom.”
Energy leader, Chris O’Shea, the head of British Gas, yesterday warned that the UK did not have enough gas energy storage which could impact the country over the winter. Gas prices surged to their highest prices in a year, suggesting large hikes in prices in the coming months.
Britain remains highly dependent on LNG gas from Qatar, which comes through the Strait of Hormuz, although the country is moving swiftly to ensure that renewable energy, including offshore wind and solar, is connected to the national grid. However, the price of energy remains predicated on the cost of gas, which is unlikely to fall given the present conflict.
