Offshore Energies UK: BP quarterly profits only a snapshot of the bigger picture

Will Webster, energy policy manager at Offshore Energies UK, which represents 400 companies involved in the UK’s oil, gas, wind and other offshore sectors, said the rising cost of energy was a global phenomenon.

He said: “The increase in oil and gas company profits is because there’s been a big increase in global prices which UK industry cannot significantly influence.

“However, quarterly and annual results only give you a snapshot showing what has been happening in recent months, so they do not tell you much about longer-term trends. It’s worth remembering that prices have been volatile in recent years with producers also experiencing periods with low returns and losses.

“We are very concerned at the impact this will have on consumers and on the economy. But those increased profits do mean that the companies producing oil and gas from UK waters are paying a lot more taxes. The UK offshore industry is now paying the highest rate of tax in its history and the Office for Budget Responsibility predicts it could contribute at least £12 billion to the Treasury in this calendar year alone.

“What we can be sure of is that when global prices go down profits will also decline. But the problem that won’t go away is energy security. And security of energy supplies is a real long-term problem for the UK and Europe.

 “The Ukraine conflict has shown how vulnerable Europe’s energy supplies are to world events such as Russia’s weaponisation of gas supplies. The UK is fortunate in having some protection from the consequences because it has its own supplies in the North Sea, meaning offshore wind as well as oil and gas.

However, the UK’s existing oil and gas fields are depleting so, if the UK wants to protect itself against similar future crises, then it must invest in new offshore resources. If we don’t invest, our own supplies will dwindle further and we’ll be even more at the mercy of world markets. So our governments should be careful to promote investment in the UK.

“As well as maintaining oil and gas production in the short-term, we also need a shift towards low carbon energy sources like wind and hydrogen. This will help minimise our imports, raise our energy security and support the UK offshore companies which are driving the effort to produce more low-carbon energy.”