President-elect Donald Trump took to his social media platform, Truth Social, on Friday to call for the opening up of the North Sea and the removal of windmills.
In recent years, oil companies have been gradually withdrawing from the North Sea, with production having dropped significantly from 4.4 million barrels of oil equivalent per day at the beginning of the 21st century to approximately 1.3 million boed today.
Trump’s comments came in reaction to a report on U.S. oil and gas company APA Corp’s subsidiary, Apache, which plans to exit the North Sea by 2029. Apache anticipates a 20% decline in production from the region year over year in 2025.
Last October, the British government announced plans to increase the windfall tax on North Sea oil and gas producers, raising it to 38% from 35%, and extending the levy by another year. The government intends to use the revenue generated from this tax to fund renewable energy projects.
Britain has set a goal to substantially decarbonize its power sector by 2030, which involves reducing reliance on gas-fired power plants while rapidly expanding renewable energy sources.
Producers in the North Sea have expressed concerns that the increased tax rate could result in a significant reduction in investments, leading many to exit the aging basin before the new tax increases take effect.
Harbour Energy, a leading British North Sea producer, has announced plans to sell off its stakes in North Sea oilfields and is revisiting the possibility of listing in the U.S., as reported by Reuters. Exxon, a major U.S. oil company, completed its exit from the North Sea region in July of the previous year.
While Britain and European nations have heavily invested in wind farms in the North Sea, the offshore wind sector, which has been growing rapidly, has faced difficulties in recent years. Costs have escalated due to technical issues, supply chain disruptions, and rising interest rates, causing many companies to reassess their investments.
Many companies are rethinking their commitment to offshore wind energy or have written down investments due to the increasing costs of developing wind farms located more than 100 kilometers offshore.
Last year, Ørsted, the world’s largest developer of offshore wind farms, reduced its investment and capacity targets.
{Matzav.com}