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North Sea Oil and Gas Companies ‘Failing to Invest in Renewable Energy’

North Sea oil and gas companies are falling short in shifting their investments to renewable energy, new research reveals. According to data compiled by Rystad, 75% of offshore oil and gas companies operating in the UK intend to invest solely in fossil fuel production until the end of this decade. Out of 87 companies, only seven are expected to invest in any renewable energy projects in the UK before 2030. Furthermore, of these seven, only two plan to make the majority of their investments in renewables by then.

These findings contrast sharply with claims from the fossil fuel industry that continued extraction is necessary to fund the shift to cleaner energy sources. Labour's government has banned new oil and gas licenses in the North Sea, although existing fields will continue to operate, and early-stage licensing applications will not be revoked. Keir Starmer, the prime minister, has also announced the creation of Great British Energy, a publicly owned company dedicated to expanding renewable projects, which will be headquartered in Aberdeen—home to the North Sea oil and gas industry. The move is intended to signal a commitment to a "just transition," ensuring that jobs created in the renewable sector replace those lost in fossil fuels.

However, the ban on new licenses has been met with resistance from the industry, as well as attacks from the Conservative Party during the general election. Despite this, research by Carbon Brief shows that the ban will only slightly hasten the North Sea's decline, as many fields are already nearing depletion.

Campaigners say the latest data shows that oil and gas companies have little intention of changing their business models. Tessa Khan, executive director of the campaigning group Uplift, criticized the industry, stating, "The overwhelming majority of North Sea operators have no intention of investing in clean energy and are solely interested in profiting from oil and gas for as long as the North Sea's dwindling resources allow." She warned that this inaction could stall the UK's progress toward its net-zero emissions target by 2050 and negatively impact workers in the oil and gas sector, leaving them without opportunities in a transitioning energy landscape.

Khan also urged Labour to resist industry lobbying for preferential treatment and to focus on supporting genuinely greener companies. "This is an industry on a different path than it claims. Labour must craft a true transition plan that puts supply-chain businesses, workers, and their communities first," she added.

The Department for Energy Security and Net Zero responded by stating, "We are engaging with industry, workers, and trade unions to ensure a phased and responsible transition in the North Sea." The department also highlighted the government's £7bn national wealth fund aimed at making the UK a global leader in green technology, bringing new jobs and investments to the country.

Michael Tholen, policy and sustainability director at Offshore Energies UK, defended the industry's role in the energy transition, emphasizing that many companies are already engaged in projects aimed at decarbonizing heavy industry and advancing renewable energy. Tholen criticized the research for presenting a limited view, explaining that companies are investing in carbon storage hubs, wind energy projects like Scotwind, and the development of hydrogen markets. However, he also warned that the proposed increase in windfall taxes on oil and gas operations could divert essential capital from these initiatives, potentially slowing the transition to clean energy.