Committee publication · Correspondence · 17 June 2026
Correspondence from David Whitehouse, Chief Executive, Offshore Energies UK relating to follow-up from Energy resilience oral evidence session on 25 March, dated 5 June 2026
From: Energy Security and Net Zero Committee
Inquiry: Energy resilience
Summary
David Whitehouse, CEO of Offshore Energies UK, responds to the Energy Security and Net Zero Committee's follow-up questions from a March 2026 oral evidence session. He clarifies the industry's position on oil and gas taxation, investment barriers, and production timelines, arguing that reform to the Employer's Payroll Tax and Oil and Gas Price Mechanism could unlock £50 billion in investment by 2050 and generate £15.7 billion in tax receipts while supporting energy security and reducing reliance on imported LNG.
Key findings
- Current tax regime (Employer's Payroll Tax until 2030) is materially inhibiting UK Continental Shelf investment; OBR forecast receipts for 2023–2028 revised down by more than 60% between November 2022 and March 2026.
- OEUK analysis shows early reform could unlock ~£50 billion additional investment by 2050, generating ~£15.7 billion in tax receipts cumulatively and supporting workforce retention in Scotland's north-east through critical transition years (late 2020s–early 2030s).
- Licence-to-production timelines average five years (per North Sea Transition Authority data from 2004 onwards); recent discoveries average four years eight months, contradicting 'five to ten years' often cited in public debate.
- Domestic gas production currently meets around 50% of UK demand; imported LNG is ~four times more carbon-intensive than domestic gas and exposes the UK to global price volatility and supply chain disruption.
- Under net-zero pathways, UK will require 10–15 billion barrels of oil and gas to 2050 but is on track to produce only ~4 billion; competitive tax and licensing could enable UK to produce around half its future needs, reducing imports rather than increasing total demand.
Tone
SupportiveTopics
Key actors
David Whitehouse, Offshore Energies UK, Bill Esterson MP, Energy Security and Net Zero Committee, Office for Budget Responsibility, North Sea Transition Authority, Apache
Notable line
“… licensing decisions taken today have immediate effects on investment behaviour.”
Key Quotes
“… the current tax regime is materially inhibiting investment in the UK Continental Shelf”
“Under OEUK's analysis, early reform to the EPL and implementation of the OGPM could unlock around £50 billion of additional investment by 2050 …”
“… from 2004 onwards, the average time from licence award to first production has been approximately five years”
“Domestic gas also has materially lower lifecycle emissions than imported LNG, which is typically around four times more carbon intensive”
“… licensing decisions taken today have immediate effects on investment behaviour. Policy stability shapes capital allocation, exploration and appraisal activity, and the willingness of supply chain companies to remain anchored in the UK.”
Source · parliament.uk record ↗