Chamber welcomes ‘vote of confidence’ in North Sea

01/08/2023
Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber Of Commerce.

ABERDEEN and Grampian Chamber of Commerce has welcomed today’s announcement by the Prime Minister that hundreds of new oil and gas licenses will be granted in the UKCS signalling a “vote of confidence” in Scotland’s world-leading energy sector.

After sustained political and business pressure, the UK Government has also confirmed that the Acorn carbon capture and storage cluster will go ahead by 2030 — with huge potential for innovation and new jobs in the North East of Scotland, where the project is centred. 

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However, a 75% tax rate on the profits of energy companies is still impacting investment decisions in the here and now with many firms questioning the viability of future projects. AGCC has today reiterated its opposition to the Energy Profits Levy, or so-called ‘windfall tax’, as a barrier to investment which still needs to be urgently addressed. 

Commenting on today’s announcement, AGCC Chief Executive Russell Borthwick said: 

“Overall this is an extremely positive day for our energy sector and for the future of the North East of Scotland — a region at the forefront of energy transition and home to a truly world-class industrial sector.

“Carbon capture is a critical piece of the jigsaw in reaching net zero. While it was disappointing for the North East to miss out on Track 1 status in 2021, a concerted effort by industry has kept this project very much alive and uppermost in the thoughts of government decision makers. That it can now proceed without further delay is great news, keeping Aberdeen and Grampian at the forefront of emerging technology and creating high-value jobs in the process. 

“On new licenses for oil and gas, we welcome the scale of the ambition and the comfort that this provides to firms for the years ahead. We know that oil and gas will be required, albeit in declining amounts, as we transition towards a greener future. It makes far more sense for us to produce our own — at lower cost and with lower emissions — than importing this resource from overseas. 

“It’s also a common sense strategy that protects Scotland’s jobs and translates into economic benefits for communities like our own. 

“Today’s announcement goes some considerable distance towards ensuring that Aberdeen can transition from its status as the oil and gas capital of Europe to the Net Zero Capital of the world. 

“That said, there remains one sizeable barrier to achieving this — in the form of the Energy Profits Levy. 

“This windfall tax is well past its sell-by date and is hampering investment in the here and now. And while the Treasury have set a price floor, they’ve done so knowing there’s little chance of it being triggered any time soon. Companies cannot have confidence to invest in the future as long as it remains.

“If the UK Government really want to turbocharge transition, deliver greater energy security and reap the long term economic benefits which can be realised right here in the North East of Scotland it’s high time that EPL was scrapped or, at the very least, for the price floor to be set at a level that reflects a fair average price for oil and gas over recent years.”

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