More North Sea drilling to be allowed in new Labour plan

Under the government's North Sea Strategy, plans to ease limitations on new oil and gas exploration in the North Sea will be unveiled on Wednesday. According to the BBC, Chancellor Rachel Reeves will announce the publication of the plan in the Budget. Soon after, the Department of Energy Security and Net Zero will publish a paper on it. The policy is expected to include a more liberal interpretation of a manifesto pledge to prohibit new oil and gas exploration using more flexible extensions of existing fields. At the Labour Conference in September, the proposal for encouraging new exploration in a way that can be tied back to existing fields was first discussed.

The findings of the North Sea study will not specifically refer to ministers' decision about whether or not to give the green light to the turbulent Rosebank field, which Ed Miliband was vocally opposed to while opposition.

The project is being handled as part of a separate and ongoing regulatory and judicial process. However, Rosebank's broader relaxation of regulations is expected to raise the chances that it will be approved eventually. Tiebacks have historically been used for small remote extensions to existing oil and gas fields that geologically stray into unlicenced areas of seabed. Rosebank is a much larger plant that does not have to rely on its own production equipment.

UK government 'badly wrong'

There has also been rumors that the windfall tax of 78%, which is set to expire in 2030, will be phased out earlier. In recent months, the oil and gas industry has been pushing for reforms to the windfall tax, or energy profits levy, which they claim has been crippling the industry. Operators are already at an all-time low, with operators instead choosing to invest their money in areas of the world with more favourable tax rates. According to Robert Gordon University in Aberdeen, around 1,000 jobs a month are currently lost. It is believed that tie backs will be seen as a hollow gesture without at least some concessions on taxation. A cap and floor mechanism would seem to be the most likely move from government, which would kick in if oil prices return to high levels as they did in the aftermath of the Russian invasion of Ukraine. According to the company, subsequent declines in crude oil prices have shown that the windfall has now ended and that taxation should reflect this change. Russell Borthwick, the chairman of Aberdeen & Grampian Chamber of Commerce, has sluggishly chastised the UK government, saying that the UK Government's North Sea strategy has been poorablyThis is the first step toward fixing the harm that has already been done,

he said, although Energy Profits Levy remains in place, this change in isolation will not stop job loss and investment in our oil and gas industry. Mr Borthwick said that keeping the EPL would

ensure that more jobs will vanish in their thousands. More businesses are expected to leave the North Sea, according to Heard.