Kwasi Kwarteng urges energy giants to reinvest their profits

The Business and Energy Secretary called on oil and gas firms to double down on energy transition investments

Big Zero Report 2022

Business Secretary Kwasi Kwarteng has written to the oil and gas industry asking it to lay out a plan to reinvest its profits to help ease the rising cost of living.

The government plans to launch another North Sea licensing round in the autumn, taking into account the climate compatibility checkpoint.

Mr Kwarteng said: “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.”

He added he would like to see in the next meeting with the energy bosses how they would “reinvest their profits, double down on investments in the clean energy transition and importantly accelerate and maximise domestic oil and gas production.”

Last week, in an interview with Mumsnet, Chancellor Rishi Sunak did not exclude the possibility of a windfall tax in the future.

Asked about whether he supports a windfall tax on profits from oil and gas companies the Business Secretary told the BBC: “I have been very publicly quoted as being against a windfall tax. My job is to encourage investment in the North Sea.

“If you ask a company to invest in North Sea gas, it doesn’t make much sense to me to then hit them with a windfall tax which is arbitrary and unexpected. So, I don’t think that is the right way.

“What I would say is that that is not for me. It is for the Chancellor of the Exchequer. He has a much wider view of the entire economy.”

Mr Kwarteng supported the Chancellor‘s view that “every option is on the table” if the energy companies will not invest in the UK’s domestic production.

The implementation of a windfall tax is long called for by the Labour party.

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