Exclusive:Scotland minister to make North Sea oil and gas pledge to 'calm jitters' over Labour's 75% windfall tax

The Labour government will move to reassure the North Sea oil and gas sector it will manage the shift away from fossil fuels in a “phased and responsible way” after the industry raised fears about the pace of the overhaul.

Sir Keir Starmer’s government has vowed to end new North Sea oil and gas licences to keep global climate commitments on track, as well as enhanced windfall tax proposals for the sector.

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But the industry has claimed the windfall tax will cost the economy about £13 billion over the next five years and put up to 35,000 jobs at risk.

Prime Minister Keir Starmer and Labour energy minister Michael Shanks (Image: Jeff J Mitchell/Getty Images)

The UK government is widely expected to confirm Aberdeen, the epicentre of the North Sea oil and gas sector, as the headquarters for its public energy company, GB Energy, imminently.

UK energy minister Michael Shanks will use his keynote speech at the Offshore Energies UK (OEUK) conference today to calm jitters about Labour’s plans. But he will insist his party remains “committed to accelerating the transition to the North Sea’s clean energy future”. 

He is expected to set out the importance of the industry to the economy and warn “the coming years will be a time to reskill, retool and resupply our pipelines of work”.

Michael Shanks. Image: Lisa Ferguson/National World.

Mr Shanks is expected to say: “The offshore industry and its onward supply chains are the foundation of so many thriving communities, including here in Aberdeen … and we will strive to serve them.

“The companies working in the North Sea are hugely important to the UK economy … both now and as we move towards our clean energy future.

“Making Britain a clean energy superpower is one of the five defining missions of the government and we won’t achieve it without the North Sea.”

Mr Shanks will add: “Our priority is to ensure we manage the transition in a phased and responsible way.

“We plan to consult with stakeholders, including the offshore industry, later this year on how to implement our manifesto commitments.

“In the meantime, we are committed to accelerating the transition to the North Sea’s clean energy future to boost Britain’s energy security and ensure good, long-term jobs.”

The North Sea oil and gas industry is on track to meet emissions targets Picture: Danny Lawson/PA

Mr Shanks’ intervention comes as OEUK announces “significant progress” towards its emissions reduction targets, as figures show its greenhouse gas emissions have fallen by 28 per cent since 2018.

The sector has now achieved its 2027 emissions target, of a 25 per cent reduction in emissions from the production of oil and gas, four years ahead of schedule.

The report also showed the sector’s methane emissions plunged by 53 per cent over the same period, achieving its 2030 target of halving methane emissions from oil and gas production seven years early.

But the targets were heavily criticised at the time of being set as lacking ambition and doing little to help the UK’s overall climate aims.

Tessa Khan, executive director at Uplift, said the targets “were so weak as to be almost impossible to miss”. 

She added: “Look slightly further ahead and the industry is set to bust its future emission reduction targets, which are supposed to be guardrails to ensure the UK meets its climate plans.

“It’s also a distraction. The industry is fiddling with relatively tiny emissions’ cuts while pursuing new oil and gas projects that it knows will push us past safe climate limits. The emissions from burning the oil and gas from a huge new oil field like Rosebank are of a completely different order of magnitude from those released from extracting its reserves.”