Britain’s energy security is at risk due to political policies, Serica Energy warns

Rishi Sunak and Sir Keir Starmer are putting the offshore oil industry at risk and undermining Britain’s energy security, a leading oil and gas company has said.

David Latin, chairman of Serica Energy, has issued sharp criticism, claiming windfall taxes and political opposition have made Britain the most hostile environment he has ever operated in, outside of war zones.

Mr. Latin, who has more than 30 years of industry experience worldwide, said: “Other than when I was responsible for a company with significant assets in a war zone, I have never encountered a political situation as challenging for investment decisions and future planning as the is currently in Great Britain.

In his speech ahead of Serica’s annual meeting, Mr Latin announced plans to move investment out of UK waters due to the burdensome and ever-changing tax and regulatory landscape. He highlighted the Conservative government’s introduction and subsequent increase of a windfall tax since spring 2022, which he said has created a state of continued uncertainty, seriously damaging investor confidence.

Compounding these issues, the Labor Party has pledged to further increase taxes and abolish sector-specific investment allowances, a move which Mr Latin warns would set a dangerous precedent by isolating a single sector from general tax cuts for companies. Oil and gas producers currently face an overall tax rate of 75%, significantly higher than the rate for other UK industries.

“This is despite the fact that the period of so-called windfalls for UK producers is long over, with oil and gas prices returning to historically normal levels,” Mr Latin noted. He criticized the Conservative Party for not proposing tax cuts, and Labor for proposing an increase to 78%.

Mr. Latin emphasized the crucial role of hydrocarbons in modern civilization and the continued dependence on them, stating: “It is certainly better to produce them responsibly under the supervision of the leading regulators in this country, with all the attendant employment and tax revenue benefits. , than importing hydrocarbons, which often have higher environmental and social costs than domestic production.”

He warned that current political policies would lead to a reduction in oil and gas production, resulting in job losses, increased imports, higher overall emissions, lower tax revenues and weakened national security. “Oil and gas will only continue to flow if the main investment facility remains open. Without this the stream dries up. Even existing oil and gas fields are in decline and require continued investment to maintain production,” he said.

In addition, Mr Latin highlighted the recent High Court decision requiring planning authorities to consider downstream emissions when approving oil and gas fields, predicting this would further push the industry out of UK waters. He concluded: “The choice is not between British oil and gas or no oil and gas; the choice is British oil and gas or foreign oil and gas. As stated in the Supreme Court ruling, emissions do not respect borders.”

Serica Energy’s strong position underlines the urgent need for a balanced approach to energy policy, which ensures both economic stability and energy security for Britain.