Oil Company Pulls Out of Massive North Sea Project Due to ‘Hostile Political Discourse’
The discovery of Pensacola, the largest natural gas find in the North Sea in a decade, has been overshadowed by deteriorating sentiment towards the oil and gas industry.
Deltic Energy, an oil company, attributes its failure to secure financing for a major North Sea gas project to “negative political rhetoric” and fiscal uncertainty.
In a notification on the London Stock Exchange, Deltic cited the “deteriorating sentiment towards the oil and gas industry” as the reason for dropping the oil project in Pensacola, which has the potential to hold 326 million barrels of oil.
In 2023, Shell discovered a significant natural gas reserve in the Southern North Sea, representing the largest find in the region in over a decade.
Political Football
Chairman Mark Lappin of Deltic expressed concerns about how jobs and the economy are being used as political tools.
Labour, favored to win the upcoming general election, plans to establish a publicly owned “clean energy company,” funded through a windfall tax on oil and gas companies.
In response to policies and political uncertainty, some operators have withdrawn from projects, as industry confidence wanes.
Industry Confidence Plummeting
A report from the Aberdeen and Grampian Chamber of Commerce warned of declining industry confidence, with high taxes and potential exploration bans threatening the domestic oil and gas sector.
Francesco Mazzagatti, CEO of Viaro Energy, highlighted the delay of a £400 million project due to the unpredictable tax regime and repeated windfall tax measures.
Despite concerns over the negative public discourse surrounding the oil and gas industry, Shell remains committed to assessing the commercial viability of Pensacola.
