The North Sea has been a hotbed of activity in 2024, with political uncertainty and heavy taxation creating challenges for oil and gas production in the region. The U.K. sector of the North Sea, in particular, has been affected by a ban on fresh licensing imposed by the Labour party government, causing uproar within the industry.
Energy Secretary Ed Miliband had to refute claims of license cancellations and confirm that the windfall tax on oil and gas revenues will continue until 2029, with a proposed increase to 78% on profits. As major oil companies exit the basin due to taxation and aging infrastructure, smaller independents like Deltic Energy are stepping up to the plate.
Deltic Energy recently mobilized a drilling unit for the Selene prospect, a natural gas field in the Southern North Sea. With a stake in the project alongside Dana Petroleum and Shell, Deltic aims to provide the U.K. with much-needed energy security through exploration and production activities.
Despite the challenging operating climate, Deltic CEO Graham Swindells remains optimistic about the company’s role in supporting energy security, job creation, and reducing imported energy with higher carbon intensity. The Selene prospect is estimated to hold significant reserves of natural gas, potentially benefiting the U.K. in its quest for energy independence.
As Deltic forges ahead with exploration activities, the political headwinds in the North Sea continue to impact major discoveries like the Pensacola prospect. With significant reserves potentially left untapped, the future of energy production in the North Sea remains uncertain amidst tax hikes and fiscal volatility.
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