First minister seeks Labour talks to restore North Sea confidence

First Minister Humza Yousaf with ChamberTalk hosts Finlay Jack (Right) and Ryan Crighton (Left)

FIRST Minister Humza Yousaf is seeking pre-election talks with Sir Keir Starmer to restore fragile investor confidence in the UK energy sector.

Speaking to ChamberTalk, a new podcast from Aberdeen & Grampian Chamber of Commerce which launches tomorrow, the SNP leader said he wants to “work together” with Labour to attract new energy investment to Scotland.

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He aligned his party with the Labour position on oil and gas, confirming that he would not seek to “rip up licences which are already there” such as Rosebank, if Scotland was to become an independent country.

And he went further, suggesting that the Scottish Government could support new projects if they were to replace carbon-intensive energy imports with a cleaner supply of domestic gas.

In a wide-ranging discussion, the first minister was candid about the challenges he has faced since succeeding Nicola Sturgeon in March last year.

He said he was committed to resetting the government’s fractured relationship with business, something which hit a low-point when the SNP-Green coalition announced a presumption against future oil and gas exploration in its draft energy strategy.

The final version of that strategy will be published this summer, and when asked if his cabinet was still aligned behind the presumption against new fields, the first minister replied: “yes”.

“The cabinet and government speaks as one voice and the current policy is as you articulated it,” he said.

“For me, the presumption is the right starting place, because everybody, including the industry, understands the severity of the climate crisis.”

But he stopped well short of saying that his government was against all new development in the North Sea. Instead, he wants to see an “evidence-based analysis” and look at each licence application on “a case-by-case basis”. 

“That’s why my position isn’t that there should be no oil and gas licenses ever in the future at all,” he said.

“But we have to look at three things – our climate obligations, we have to ask the question about workers and the just transition, and then energy security. We have to ask those questions and strengthen the climate compatibility checks.”

He added: “Where we can reduce our importation because of the carbon implications of that, then of course we should be favourable in terms of that consideration. And that’s why I say to you that these decisions should be made of a case-by-case basis.”

Holyrood’s presumption against future oil and gas developments – together with the Labour Party’s pledge that North Sea exploration would end if they win the election – sent North Sea confidence tumbling last year.

Both parties have since added some nuance to their respective positions in an effort to provide reassurance to energy companies operating in the UK Continental shelf, many of which will be critical to financing the energy transition.

Mr Yousaf said he acknowledged that investor confidence in the sector was important – and offered a surprising olive branch to the Labour party in London.

He said: “There is going to be a change of government in 2024 – and my offer to Keir Starmer and Ed Miliband is to come speak to us in advance of a general election and let’s work together to unleash the potential of Scotland’s renewable sector.

“Let’s do that in a way that gives investors the confidence they need to invest now in Scotland to deliver a great economic return in the years and decades to come.”

Mr Yousaf went on to say that nobody working in the oil and gas sector should fear for their future.

Asked if he had a message for those working offshore, the first minister said: “I not only value what they are doing at the moment, I believe they also have massive potential to help us to power on the just transition to net zero.

“The oil and gas industry is going to continue to be in Scotland for not just years, but decades to come. But we know those skills are so transferable into renewable technologies.

“There is massive opportunity if you are an oil and gas worker in the North-east.”

He added: “I see the oil and gas industry as being partners in unleashing our renewables potential. They’ve got deep pockets and they are able to leverage in private investment.

“But my job is to challenge them and to say put your money where your mouth is and let’s move this transition as quickly as possible.

“Let’s unleash and unlock that renewable potential and let’s do it together at pace. The industry is up for that challenge.”

The podcast can be viewed HERE:

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