Foreign Secretary's allies have opened talks with energy firms about ramping up domestic oil and gas production to combat rising prices
Source - Daily Telegraph - 30/08/22
Liz Truss's most senior advisers have opened talks with energy firms about ramping up the production of North Sea oil and gas if she becomes prime minister.
Kwasi Kwarteng, the Business Secretary, and Jacob Rees-Mogg, the Brexit opportunities minister, are striving to maximise domestic production ahead of the winter.
They have been involved in discussions with global giants including Shell, Total and Perenco about plans for a new round of drilling licences, according to The Times.
The pair are expected to take up the top two positions in the Treasury, with Mr Kwarteng becoming chancellor and Mr Rees-Mogg the chief secretary.
Allies of Ms Truss insisted the pair held the talks in their capacity as current government ministers and not as part of her transition plans for entering No 10. Boris Johnson's Government announced plans to hold a new round of oil and gas licences this autumn in May.
The Foreign Secretary has repeatedly vowed to significantly increase Britain’s gas production if she becomes prime minister to combat rising prices and end reliance on imports.
At an early Tory leadership hustings in Exter, she pledged to "make sure we exploit all of the gas in the North Sea and... use that to bolster our domestic energy supply".
Offshore Energies UK, which represents oil and gas producers, confirmed that talks had been taking place with members of the Foreign Secretary’s team.
It described them as "responsible action by what could be an incoming administration to consult with the energy industry at a time of crisis", in a statement to City AM.
A Whitehall source also told The Telegraph that discussions have been taking place. It is expected that as many as 130 new drilling licences will be approved this autumn.
Among the projects expected to get the green light is one off the coast of the Shetlands, that could provide eight per cent of UK production by the end of the decade.
Norwegian state energy firm Equinor wants to extract 70,000 barrels of oil a day from the Rosebank field, with pumping set to begin in 2025.
The plans to significantly ramp up North Sea drilling delighted the Foreign Secretary’s supporters, who have been calling for more domestic production.
John Redwood, a Tory MP also tipped for a ministerial post in the Treasury if she wins the leadership, said it would "ease the squeeze" on energy prices.
"More permits and some changes of rules can boost output. The answer to an energy shortage and sky high prices is more supply," he said.
But the move will jar with Ms Truss's vow to stick to the Net Zero target, just weeks after Britain experienced a searing heat wave and drought warnings.
It is also unlikely to provide any immediate relief for families facing hardship this winter, as the gains from more drilling will only be realised in the medium term.
Critics of plans say that North Sea oil and gas will just end up being sold on international markets and will do little to solve Britain’s problems.
It comes after Ms Truss faced criticism for her refusal to fully spell out how she would help families through the cost of living crisis this winter.
Ofgem announced on Friday that the energy price cap will rise by another 80 per cent from October, taking the average household bill to £3,549.
There have been warnings that costs will continue to rocket further - potentially hitting a high of £7,700 from April next year.
Allies of the Foreign Secretary have insisted that she will look at providing more targeted support to the poorest families once she is in No 10.
But they have stressed that her priority will be to cut taxes to incentivise work and leave ordinary Britons with more money in their pockets.
Ms Truss plans to scrap the planned hike in corporation tax to 26 per cent from next year and reverse the National Insurance rise enacted in April.
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