Business minister Kwasi Kwarteng has written to the North Sea oil and gas industry asking it to set out a clear plan to reinvest its profits into British energy projects, his department said on Saturday.
In march 2021 the UK government agreed on the North Sea Transition Deal, a Sector deal between the government and the offshore oil and gas industry. This deal is set to harness the resources of the offshore energy industry to deliver net-zero by 2050, an official document by the UK's Department for Business, Energy and Industrial Stategy stated.
Energy prices have hit record highs this year and big profits for energy producers have led to repeated calls from the opposition Labour Party for a windfall tax on producers of North Sea oil and gas to fund help for people struggling with energy bills.
Earlier this month the government set out plans to scale up domestic sources of affordable, clean and secure energy, including a new licensing round for North Sea oil and gas.
"In return for the UK Government’s ongoing support for the sector, the Prime Minister, the Chancellor and I want to see a very clear plan from the oil and gas industry to reinvest profits in the North Sea and, importantly, in the clean energy technologies of the future," Kwarteng wrote in his letter to the industry.
"At our next meeting in the coming weeks, I would like you to set out how you will reinvest profits, double down on investments in the clean energy transition and importantly accelerate and maximize domestic oil and gas production."
Power and gas prices for millions of households rose 54% from April after regulator Ofgem increased its cap on the most widely used tariffs in the wake of wholesale global gas prices hitting record highs.
Since the new cap was set, global gas prices have risen further, following Russia’s invasion of Ukraine.
"We need to collectively show the British people how the success of our offshore oil and gas sector has a direct and enduring benefit to the British economy and people’s jobs and livelihoods in order to protect the North Sea as a major UK energy asset for decades to come," Kwarteng wrote.
The North Sea deposit is located in between the United Kingdom, Norway, the Netherlands, Germany, France, Denmark, and Belgium. Active oil fields include the Brent, Forties, Oseberg, Ekofisk, and Ninian systems.