Committee publication · Correspondence · 12 August 2025
Letter from Energy Minister Michael Shanks following up from 2 July session, dated 9 July 2025
Summary
Energy Minister Michael Shanks clarifies his previous statement on North Sea oil and gas production, emphasizing the government's commitment to a managed transition while maintaining that new exploration licences will not materially affect the sector's decline. He also provides follow-up answers on Project Willow, Grangemouth investment prospects, and government support mechanisms, noting 84 commercial enquiries received.
Key findings
- Minister clarifies that while UK oil and gas production remains important, new licences for unexplored fields will not materially affect the North Sea's ongoing decline that began 25 years ago.
- Project Willow has established evidence base for future investment in plastics recycling, hydrogen production, and sustainable aviation fuel technologies at Grangemouth.
- 84 enquiries received for Grangemouth projects; government in active discussions with potential investors but citing commercial sensitivities for limited disclosure.
- National Wealth Fund has allocated £200 million for co-investment with private sector; timing dependent on investable propositions meeting Fund principles.
- Grangemouth Investment Taskforce co-chaired by UK and Scottish governments meets regularly with businesses; wider Scotland Office-led group coordinating cross-Whitehall support for Falkirk and Grangemouth communities.
Tone
FactualTopics
Key actors
Michael Shanks MP, Patricia Ferguson MP, Scottish Affairs Committee, Department for Energy Security & Net Zero, Scottish Enterprise, Office for Investment, National Wealth Fund, Grangemouth Investment Taskforce
Notable line
“… new licences to explore new fields will not make a material difference to the decline and we must focus on delivering a prosperous transition in the North Sea.”
Key Quotes
“Oil and gas production will remain part of our energy system for decades to come, and we will deliver a phased and managed transition by supporting existing fields for the full extent of their lifespan.”
“… this transition away from oil and gas production from the North Sea is already underway and has been since production peaked nearly 25 years ago.”
“Project Willow has laid the foundations of a robust evidence base to support future investment in technologies, including plastics recycling, hydrogen production and sustainable aviation fuel”
“The National Wealth Fund has made £200 million available for co-investment with the private sector, and the timing and investment is dependent on how quickly investable propositions that meet the Fund's principles come forward.”
Source · parliament.uk record ↗