Good morning. Welcome to this meeting of the Scottish Affairs Committee looking at energy and the just transition. Before I go any further, I am going to pass over to Jack Rankin, who wants to make a declaration of interest.

Thank you. It is just to highlight to Members my financial interests on the register of interests and that my career was in renewable energy, particularly trading electricity and new build development. I remain a shareholder and director of an advisory business that helps funds originate and structure long-term power purchase agreements.

Thanks, Jack, for the clarity on that one. Good morning, Louise, and good morning, Hebe. We are going to go straight into our questions now. Can I ask you both to introduce yourselves and give us a short explanation of your role in the company and the role that your company plays in the North sea?

Good morning, everybody. It is nice to see you. My name is Louise Kingham. I am the senior vice president for Europe and head of country for the UK at BP, which is a role that I have fulfilled for the last three and a half or so years. That means that I have responsibility for working across that region trying to integrate our businesses and looking for opportunities for their development, both in terms of oil and gas but also in our low carbon investments across every business that BP has that is operational across that region. We have a lot of activity in Scotland, as you will be aware, as an operator that has been there for six decades—just over six decades. We have an economic impact there of around £2.2 billion in gross value added to the economy. Last time we looked, back in 2023, we had spent £720 million with suppliers in Scotland and across the UK. We support 2,000 jobs directly and 11,000 jobs indirectly in Scotland and produced, last time we quoted the numbers, 59 million barrels of oil and gas at the end of 2023. We have not reported 2024 yet. So £1.9 billion paid in taxes in the UK, with £636 million or so of that related to the energy profits levy. Across the UK, we have an investment programme of up to £18 billion. Between 30% and 40% of that is pointing at oil and gas investment, potentially, and the remainder is across offshore wind, carbon capture and storage, green and blue hydrogen, and our retail and convenience network. It is a very diverse portfolio of investments across the UK, much of which touches different aspects of our businesses in Scotland.

I am Hebe Trotter. I am the vice president of global government relations for Harbour Energy. I joined the company about five months ago, so bear with me. I hope to answer as many of your questions as I possibly can. We are predominantly based in Aberdeen and employ over 1,000 people in Aberdeen, but actually over 1,300 people in Scotland, including all our contractors. To date, we have spent £4.6 billion in the UK between 2021 and 2023. Largely, we are an oil and gas company. We are proud to be an oil and gas company, but we also have projects in carbon capture and storage, both in Scotland in the Acorn project, where we are a 30% investor, but also in the Humber, one of the highest emissions industrial areas, where we are a transport and storage company. In total, that is billions of pounds of GVA that Harbour Energy is looking to bring to Scotland and to the wider UK in jobs growth and opportunities for our industrial heartlands.

How long do you expect to extract oil and gas from the North sea basin?

We have plans, very clear plans, out to 2030 and the potential to look much further ahead than that. There is a lot of economic opportunity still to be had from the basin, while recognising that it is a mature basin, which I think we all understand. There is a lot of economic opportunity for Scotland and for the UK. What we need to be able to unlock that is clarity around the policy and the regulatory frameworks in the fiscal environment post 2030. We know some of the shape of that from a fiscal point of view, given the guidance at the Budget around the energy profits levy and the sunset to 2030. However, there is quite a bit of outstanding information for us as potential further investors to be able to get clear on consenting, the future arrangements for consenting and permitting, and future arrangements around scope 3. We have responded to that consultation and we are very happy to share that with this Committee. Now we wait for the Government to respond to that so that we can get clarity. I think, in essence, Chair, what we need is active stewardship of the basin, recognising that it is mature, with the right fiscal and regulatory environment that competes with other places in the globe where this work can happen. That is how we retain skills, economic value and supply chain here in the UK, Scotland and the North sea.

It entirely depends on what the economic and fiscal situation looks like as to the success that it could bring for both our companies, but critically to Scotland as well. If we are in a position where we have the right economic environment and the right regulatory environment, then for both our proven resources and those that are commercially viable for us to extract, studies show that there are up to 20 more years of extraction available and then beyond that there are more “yet to find” discoveries if we were able to proceed with further licences. There is a huge economic opportunity in Scotland and for the rest of the UK if we are able to proceed. That is going to be possible only if we see a better, more sustainable fiscal environment. The reason why this is so important is because not only is that critical for future production but it is that future production that underpins jobs, particularly in Scotland, which underpin the growth that the UK is so desperately in need of, and underpins the ability to transition into that cleaner energy and see those green technologies that we are so desperate to be able to roll out over time as well.

Evidence that we have seen from the Port of Aberdeen has indicated that the basin is declining more rapidly than previously anticipated. Do you agree with that assessment and, if so, what do you think the reasons for that are? Laying aside any fiscal problems, difficulties or hurdles that you have to overcome, is the maturity of the basin also impacting on the profitability of extraction?

I have not seen the details of that assessment by the port so I cannot appreciate and comment specifically on that, but as a general point, investment has definitely slowed right down, almost to being that we are in a holding pattern at the moment for the reasons that I have just described in terms of the clarity we need around the fiscal environment post 2030, the regime for consenting and permitting and any changes to that future licensing, as Hebe mentioned. If we can get that certainty and stability back into the system in the UK in terms of the policy and the regulatory framework, then we can look at the economics of investing and see if that meets our hurdle rates and if there are the right conditions to do so. It is widely understood that the basin is mature and therefore it will be in a slow decline. If you wanted to say has it stalled because investment has slowed, the practicalities of that are, yes, we cannot invest until we have certainty around that framework and feel confident that it is a good use of investors’ money.

Just to back up what Louise was saying, OEUK, who I know you are hearing from later, has put out a report saying that if there is the right fiscal environment, we could double our oil and gas recovery but also add £200 billion-worth of economic value to the UK and most of that in Scotland. There is a huge upside. The reality is that both of us work for international companies. We have to compete for capital and we have to compete for capital from within our own business as well. There are plenty of other countries that we operate in that have a more favourable fiscal environment and every pound that is decided not to be spent here in the UK is essentially fewer jobs, less money in tax receipts to the Exchequer, and critically, lower investment meaning less growth and less economic value for Scotland.

How much influence does the decline of the basin have on your decision making? I am trying to extract the two sides of the problem.

I understand, Chair. There is plenty of economic opportunity so I do not think it is a major factor. The things we have been referring to about the regime, and the framework in which to be able to invest, those are the things that are important. If we do not have clarity on that, the basin cannot compete with the other basins in which we operate and the capital will be drawn there, understandably because it is the best use of the capital to be deployed. That is the opportunity that we think is there. There is great economic opportunities still to be had. The Climate Change Committee has said that oil and gas will be with us for decades to come. It has also, I think, made the observation that North sea production is lower carbon production. We have made great strides in the North sea in reducing emissions and we will continue to do so under the transition deal. From the point of view of productivity, economic value and jobs, it makes absolute sense to be able to make the economics stack up and continue to invest.

Harbour is a fairly new company. We certainly have not been operating for 60 years like Louise, but we chose to invest in the North sea because we saw the value that was there and we saw the possibility to still seek further production and hydrocarbon extraction. We do think that there are opportunities there in the North sea, but these are not going to be commercially viable if we do not see the stability of an economic and regulatory landscape that supports and allows for further production.

That is very helpful.

There are a lot of commentators and a lot of political parties that have a view that it is not environmentally friendly for us to extract oil in Scotland, but they do believe it is fine to import it from other countries. Then the opposing argument is that it is more environmentally friendly to drill here and extract it here than to import it. If that is the case, why is there not a consensus to maximise our own extraction of oil and gas?

If I may, your guess is as good as mine. You are right, 70% of our energy at the moment comes from fossil fuels and you know the Prime Minister has himself said it is here for decades to come. Data from the sixth CCC budget showed that we are going to need 25% of our energy to come from oil and gas in 2050, so it is clear that we still need to use oil and gas in our energy generation, industrial use and, of course, for transport, but we will see that change over. If that is the case and we cannot switch off and change to renewable technologies immediately overnight, you are right, it is better to use the domestic oil and gas. However, first and foremost, other than obviously the benefit to jobs and the economy, is that, particularly for gas, if you use domestic gas, which is about 50% of our gas use here in the UK, it comes at a four times lower emission rate than if we import LNG from abroad. We have used imports to date and we will have to start using more of them, but as a result it surely is better to use more of our domestic production for as long as we can at a lower emission rate. I agree.

Under the transition deal, industry is committed to deliver a 25% reduction in emissions by 2027 and, I think, 50% by 2030. How confident are you that these targets will be met and that we will reach net zero by 2050?

You have witnesses who are coming from a more sector-wide place who are speaking to you, I think, after us. They may want to comment from a basin-wide view. Certainly, from our view at BP, we are very positive. We have made some great progress. That 50% target is retained for 2030. We believe it is right to decarbonise. Just related to the previous conversation, it is the right thing to be doing. I think there are different routes to doing that. Last time I looked at our stats, if I remember rightly, we had reduced operating emissions in BP’s operations by over 30% from 2019, so we are confident that we can keep making that progress. We have also significantly reduced the methane intensity by deploying drones and other technology to help us with that, too, which is another important aspect of taking out of the energy system the things we do not wish to retain while we want more energy.

From a Harbour perspective, we have reduced our emissions by 30% since 2018, which is above industry standards—at the moment the industry standard is about 24%—and we do think that we are on track to be able to hit our 2030 targets as well. What is interesting, looking at the Climate Change Committee’s report out this morning—if anybody has had a chance—it says that by 2040 we should be reducing, and it looks like we are on track to reduce, emissions from the oil and gas sector by a further 40%. That is including new investment into new oil and gas and future oil and gas from the North sea. We are on a trajectory that allows us to both further produce and still reduce carbon emissions, which I think is critical.

I should first say that my partner works for Harbour Energy, though not in the oil and gas side of the business. Thank you both for coming. I was going to talk about licensing and permitting, which I think, Hebe, you have already touched on. What is your view, or the industry view, on the Government’s position of not permitting new licences, either from your individual companies or from the sector as a whole, because obviously there are a lot of interconnected businesses up in the north-east?

Yes, there are, Harriet; you are quite right. One of the areas for clarity with this conversation is—or probably two different conversations—around how consenting and permitting will be treated going forward, which is the bit I think, certainly from BP’s point of view, that is more critical because licences can have been awarded many years previously, as you will appreciate, before you then want to activate them and get into development, production and so on. That is where the consenting and the permitting part is important. The clarity around that in relation to scope 3 and any changes to consenting and permitting are the answers to the questions we need to get to release further investment. That uncertainty is a real barrier to future investment. On the question of future licences, the basin is a mature basin so it is unlikely that there is significant frontier development-type exploration remaining. That said, there is still an awful lot of opportunity, as I said before, to economically develop in the right framework against the licences that we already operate. My preference is to get the clarity over consenting and permitting as quickly as we can so that investment can start to flow again in the right circumstances.

I would back up what Louise said and say that speed is of the essence here. We are on a critical time path and we need to have clarity as soon as possible. Picking up on something you asked in your question about the interconnectedness of companies, it is that supply chain piece that is important that we must not underestimate as well. A decision by an oil and gas company not to go forward does not just impact the oil and gas company; it impacts the supply chain underneath. To give one instance, a decision not to go ahead with a contract to one company has a massive cascade effect to up to 20, sometimes even more, companies underneath them not getting their further contracts as well, which has a cost of hundreds of millions of pounds to the UK. Those are the same companies that will be providing support to the clean energy transition that we need. We need to be able to provide support to those supply chain companies that allow us to manage that route towards clean energies that is so impressive within what the UK is doing and the big ambitions that this Government are setting out for us.

As one final point to that, this transition will happen over the next few decades. It is not that we are going to wake up tomorrow morning and we are in that place. The art for us as those who are investing across these businesses is to get that transition, that balance, right from a workforce and a supply chain point of view. Timing is everything, and if we don’t get clarity swiftly on some of the things we have already been discussing, we start to create the danger of a cliff edge where you cannot do the things that Hebe is describing in retaining workforce and supply chain commitment. There is a big wide world out there and there is global competition for what we want to do here in the UK. That is the risk we take by getting out of sync on the point of timing.

Looking at the two hot topic fields, Jackdaw and Rosebank, obviously they have licences; it is the consents that are the question at the moment. What damage would it do to the sector if the speculation about whether those go ahead continues for too long and, secondly, if they were not granted based on the consents, despite them having their licence? What impact will that have on your businesses or others’ investment up in the north-east?

BP is not involved in those particular fields, so I will not comment on the detail of Rosebank and Jackdaw.

Neither is Harbour.

As a principle, however, we have already seen everyone pause to wonder what is coming next, because it has created a lot of investor uncertainty. Clearly, if you have spent millions and millions of pounds investing in the development of a field to produce and then that gets halted or consents get withdrawn, you are in a very difficult position. That clarity around the future of consenting and permitting is important in order to build investor confidence back into the North sea, which is very important.

I reiterate the speed point again about needing to have clarity as soon as possible. We should also not forget that Rosebank will provide 2,000 jobs predominantly in Scotland. Jackdaw will provide around 6% to 8% of the UK’s gas supply and need, and both projects will bring huge amounts of value and GVA to predominantly Scotland. There are real values for both those projects. We are not in either of them, but what we do need to see is the clarity around the consenting, the permitting, and the future fiscal framework to allow us to be able to hope to support with further investment of our own.

You have to compare that with the stability of other basins globally. What is happening in those basins? What is the framework and the environment like to be able to invest in other basins compared with the North sea? At the moment that is difficult without the clarity we have been asking for during the conversation.

It is difficult to say what we expect from it before seeing what might be in the consultation, clearly, but we have been constructively engaging with Government since the change of Government back in the summer, and obviously previously under the different arrangements within the industry. The engagement is constructive and the conversations have been very open and transparent. There are clearly difficult decisions that Government have to take across the portfolio of choices to be made. I go back to my earlier point. It is the consenting and the permitting answers that are more important to near and medium-term investment opportunities than the longer-term decisions around whether future exploration licences, for example, will be granted. The fiscal environment, the regulatory framework around permitting and consenting, and clarity over scope 3 and how that relates to consenting and permitting would be my priorities when I look at what the BP investment portfolio looks like. Clearly, it will be helpful to appreciate the future of licensing in the wider longer-term context, but as I said, many companies have licences that they have not yet brought into action in a development and consenting context, so there is economic value to be had before we almost get to that point in the conversation.

I would agree with everything Louise said. For us, the more critical consultation is the one that will be issued by the Treasury on the future fiscal framework. What we would like to see there is bringing in a stable and predictable mechanism that allows us to make investments against the UK environment and, ideally, one that is beneficial to the Treasury and, of course, to companies. If that is the case, let it be brought in earlier than 2030, because 2030 is too late for us in terms of being able to continue our investment into the future of the North sea.

Certainly, the experience was of constructive engagement between ourselves and Government in the run-up to the Budget all through the summer, when we were very focused on the energy profits levy and any changes to investment allowances that were being discussed at that point. I genuinely felt that we were listened to and were heard in difficult fiscal circumstances. Again, much of that conversation was about the value to the economy, the jobs, the supply chain, the tax contribution to the Exchequer and the significance of all that as we projected forward. I do think all those things are understood, appreciating that there are difficult wider decisions. We are not living in a windfall world any more; that has long gone. Taxes are a matter for Government to make those decisions about, but it is understanding and having a stable fiscal regime, as Hebe says, that is important. We cannot make investment decisions today not knowing what that regime looks like from 2030 onwards—or if it was brought forward—because these are 10 to 25-year investments, maybe longer. That is the vulnerability without that clarity.

Good morning. How has the UK Government’s energy profits levy impacted the North sea oil and gas industry?

If I can give a couple of examples, last year we paid out 95% of our profits before tax in tax. Then in 2022, our profits after tax were £8 million. Bear in mind that that was after we paid a £1.5 billion one-off associated tax charge because of the EPL. We are in a world where we are paying a lot of tax. Ultimately, what that means is we are not able to compete for capital against all the different basins that we also operate in and try to promote further production and future investment into the North sea. In reality, that has a knock-on impact on jobs, on skills, and on growth in the UK economy. We have unfortunately had to reduce our workforce by 350 people as a result of the EPL and if we are not able to continue and get certainty over the future of that, it will have further impacts. As Louise was talking about earlier, we know that we will be going into a transition to green technologies, but we want to slow down that pace of change and decline in the oil and gas sector without having a managed transition over to green technologies. That gap—that valley of death, as we call it—means that those jobs and those skills just go abroad or they do not get developed in the first place, and that is critical to undermining the ambitions of the green technology and cleaner energy sources as well.

On the back of that, what are you doing to meet your commitments set out in the North sea transition deal?

As I said, we are pleased that we have reduced our emissions from 2018 by 30%, which is above average, and we are on track to meet our 2030 commitments of 50% as well. We are also pleased to see that that is reflected across the industry, so we will continue to put the work in there and continue attempting to nail down and focus on making this a lower carbon place to extract hydrocarbons from. That is the benefit of doing it over and above importing, particularly gas, which comes at a higher emission content.

You will no doubt be aware of Uplift’s view that, “much of the responsibility for driving the North Sea’s transition has been left to oil and gas companies, who have neither the capacity”, nor the interest, to drive the transition—that is their suggestion, not mine necessarily. Would you agree with that statement or, I suppose, would you like to comment on it? Do you think, ironically, the profitability of oil and gas is hampering the growth of green or clean energy?

That is an interesting quote, Chair, and I think the last time I was sat here, Uplift was sat at the end of the table as we were in conversation, and it was an interesting conversation. It is an interesting perspective and it is important to listen to all the voices in the conversation around oil and gas. I have to say I don’t recognise it as BP. As I said to you, we have an investment programme of up to £18 billion, which cuts across EV infrastructure, offshore wind, carbon capture and storage, green and blue hydrogen, retail and convenience and oil and gas. At any point in time when I look at the investment programme, we are a third in oil and gas and two thirds in the rest of what I have just rattled off to you as a list. I don’t recognise that. I do recognise that every company has a different investment profile and a different business footprint in Scotland and across the UK. The transition is a challenge. We talked about getting the timing right, being in balance, shifting supply chains, and moving the workforce. There is a lot of opportunity in that. It is difficult to do but I think what companies like mine can do is to just bring the technical, scientific and engineering capability to bear. We have deep functional discipline capability in the North sea business, which is incredibly important, and we take it everywhere that we operate. We make it here and we invest a lot in people to do that. We have the opportunity to collaborate with partners, which means that we can do things in a more capital-light way and we can try to accelerate the opportunities. Particularly around low carbon investment, that is a real opportunity because it is expensive to do. These are sometimes first-of-a-kind projects, but you can use a lot of the capability that an oil and gas company has to deploy on working out how to do those things and build those things. When I look internally at some of our recruitment, for example, when we were building out the hydrogen projects in the carbon capture and storage and the offshore wind business, almost 40% of the vacancies were filled internally by people moving from the oil and gas business into those businesses because the skillsets are largely transferable. It is the context that might be a bit different but the skillsets can move around—that is quite well enabled. That is the thing that we can bring to the opportunity that the transition presents.

I would back up and say the industry does not see it as oil and gas “or” green jobs. It is definitely an “and”. This is about doing it together in a way that manages and creates that soft landing for people to be able to move from oil and gas into green technologies. BP’s example there of hydrogen and CCS is one of them. Certainly, we find the same within Harbour, with our own focus on moving towards CCS projects as well. Reports have found that there is a 90% transferability of oil and gas jobs into clean energy jobs, so there is a very clear read-across that we could achieve. At the same time, with a mismanaged transition and if we do not achieve a managed decline of the oil and gas sector, essentially we are at risk of reducing our oil and gas workforce by half before we have the requisite jobs on the clean energy side to build into. I think that is what we need to achieve, allowing for that smooth landing for people within the oil and gas sector through to the clean energy jobs.

To follow that up, do you think there is sufficient financial incentive for investment in clean energy and low carbon technologies?

There are some financial incentives that have become clear. There is still quite a lot of working out to do and I use blue hydrogen as an example for that, thinking about our project in Teesside as something we need to get clarity on. That, again, is in process with consultation, discussion and spending review decisions, no doubt. For an investor, it is about the pace of decision making to get to that clarity when you are competing globally to do CCS or hydrogen or offshore wind or oil and gas anywhere in the world. That is the position for us. We were delighted to be able to get, in collaboration with Government, the final investment decisions and financial close on the big projects in Teesside. There is more work to come there, clearly, but we look forward to helping to start construction. We got there first here in the UK, while others in other parts of the world were working out what the policy framework and the opportunity for investment was. That is the competitive urgency we need to put back into the system, with both decision making and pace of execution. Investor confidence comes with that, when the clarity is there and the decisions can be made.

I think speed is of the essence. We have also invested in carbon capture internationally as well. Actually, on the same day that Louise reached an FID with BP in the north-east, we reached an FID in Denmark for carbon capture, but we are still waiting for further commitment from the UK Government as to what the future is of the track 2 programme within the CCUS tracks. We would welcome movement on that and would encourage the Government to bring out further pipelines, particularly within the spending review in June. Without that, and without the speed that enables us to map our investments against it, we are at risk of losing out internationally and to other countries that are moving, in many respects, quicker than us. So speed probably is the key message there.

Speed and stability, not necessarily the financial incentives. That is very interesting.

You have very eloquently outlined how we deliver a managed transition, but more importantly the fact that we must deliver a managed transition. Certainly, for those of us in north-east Scotland, that is something we reflect on quite heavily almost daily. In that context, could you perhaps talk us through in a bit more detail the capital resource that sits behind your company’s investments in low carbon technology and how that is currently comparable with what you are investing in the extraction of fossil fuels?

It probably goes back to what I said at the beginning, with the programme of up to £18 billion of investment that we announced in 2022 for the coming decades. We are about halfway through that and it is roughly about 30% invested and pointed at investing in the North sea. Then the rest of that is across the other portfolio of low carbon investments that I talked about: three offshore wind developments, one off the coast of Aberdeen and two in the Irish sea; green hydrogen in Aberdeen, and we are in partnership with the city council; and blue hydrogen in Teesside, where about 10% of the Government’s current hydrogen target could be developed. We have talked about the carbon capture and storage investments in the East Coast Cluster and Net Zero Teesside power station. That will be the first of a kind, I believe, at the moment in the race to get there as a gas-fired power station with carbon capture and storage. It will also be an opportunity, as Hebe has pointed out, for other customers of that system to dock in and take the emissions out of their business and have a sustainable platform going forward, too, in the subsequent tracks that we would like to see come out of the spending review. About £1 billion of that programme is investment in EV infrastructure over the period. We have about 3,000 fast and ultra-fast charge points and we want more. The UK is one of four markets we are very focused on globally to make that happen. We welcome what we read from the Climate Chante Committee this morning. Then, across our retail and convenience network, what customers would recognise as forecourts that they pit stop in is the other final place where that investment flows.

For us, we have invested millions already into our carbon capture projects but, fundamentally, this all hinges on the spending review and if we are able to see where the future tracks will go for track 2. That is for both Viking in Humberside and critically for Acorn up in Scotland. If we do see a beneficial result in the CSR, the spending review, then in Scotland—in the Acorn project—it will unlock around £17 billion of GVA and nearly 20,000 jobs. In Viking in the Humber, likewise it will unlock up to £15 billion in investment worthwhile to the Humber. These are both areas that need that investment as well and need us to keep the industrial heartlands of those areas going. We want to see decarbonisation but not a deindustrialisation. Moving ahead with these projects and being able to get that signal in the spending review in June is critical to those communities and to us being able to promote and continue with our green and clean technology investment as well.

I would like to think that we all agree, certainly in relation to the Acorn project, where certainty has been lacking for a long time over numerous Governments. In relation to BP, Louise, in 2022 it had a target to reduce its oil and gas by 40% by 2030. In 2023 it lowered its target to 25% and it has been widely reported this morning, as I am sure you are very cognisant of, that BP plans to drop the target altogether. Can you provide some clarity to the Committee in respect of the decision-making process?

We sit here in the Committee with a capital markets update taking place this afternoon, so I don’t want to pre-empt the words of my group CEO. There are a number of announcements that will be made this afternoon around getting more focused, simplifying the company and creating longer-term value. We will be setting out in that how we intend to approach more activity in oil and gas as a global organisation, with a tighter discipline around our low carbon investment, again from a global perspective—this does not change any of the description I have given to you about the UK investment programme I have just described—and a tighter, more focused approach to how we are organised with a lot of different downstream businesses, as we call them: retail, the Castrol business and various other things. If you get the chance to tune into that a bit later on—there will be materials and information, I am sure, posted on the website later today that explain more of that—you will see it does not change the activity set that we have here in the UK. What it will intend to do is to look for further opportunities to develop oil and gas globally, so that is an opportunity for the North sea as much as it is anywhere else that we operate. Again, we have to go back to the beginning of our conversation: the conditions to invest need to be the right ones.

With your indulgence, Chair, I will ask a further question. This is not a unique discussion to BP, but something that has been reflected across the wider energy sector. Do you think that is a reflection of simply the profitability not being there at present in the renewables space or is it more a reflection of Government policy?

It is an interesting question, Stephen. The world has changed in the last five years. When we first produced the strategy, back in 2020 before I joined the company, I do not think anyone saw the pandemic coming. We did not see the invasion of Ukraine or the cost of living crisis coming. The world has very much changed and that has meant that through all those experiences that we have lived through, the transition has not happened as quickly as we would like. It is going slower, essentially. Our job is to do three things. It is to invest in the energy system—right across that system—in the most efficient way for our owners to see value. You are right that some of the investments have not returned the value that industry-wide they would have liked to have seen, so that is a challenge. The other thing that we do as a responsible business is then pay our taxes on the back of that and return value to shareholders. That is what businesses have to do to be in business, which hopefully is appreciated. I would point again to the other thing we have seen from where we were five years ago to the capital update we will do later today. We have the biggest bioenergy company in Brazil that we purchased last year for our bioenergy business. We have, I think, the biggest biogas business in the US that we have also acquired. Again, I think that is No. 1 there. We have acquired the rest of Lightsource BP, so we have 100% ownership of that, and we will be looking for partners to come in and join that work with us because it is the most efficient way to try to invest in low carbon and accelerate the growth in those businesses quickly. Then we have also announced the joint venture with JERA Nex to create JERA Nex BP, and that builds the fifth largest global offshore wind company in the world. We remain a net zero company—that ambition has not changed—but we have to get smarter and more efficient about how we get there, look back at what we have learnt in the last five years and think about what that does for our mid-term plans for the next five. How do we adjust to do that in the best and most efficient way possible? That is what we are trying to set out later on today, so if you can make some time to watch, please do.

Would it be fair to say that the tag that a previous CEO gave to BP, when he described BP as now meaning “beyond petroleum”, still holds?

I think that is where the world ultimately needs to go. We just have to recognise that that transition is going to take longer than we thought when we sat there five years ago writing that plan. That is the fair and honest reflection of what we have learnt in the past five years. We have tried to do an awful lot and probably spread ourselves a little bit too thin. Every company has a limited capital frame to be able to invest in order to grow. We need to keep the energy that the world needs today alongside developing the energy that the world needs for the future. That is what the investment programme we have here in the UK is trying to deliver. As Hebe mentioned earlier, on average, an offshore wind farm takes you about 13 years to build. I can get a North sea investment and a tieback within two to three years before I could get a third or a quarter of the way into building that wind farm. That is the bit that we have to try to readjust and get in balance. It does come back, I think, to that pace of decision making, clarity on policy, and clarity on the regulatory framework. I made the point at the beginning about active stewardship, recognising that it is a mature basin. To compete with investment with the rest of the world, that is how we have to look at it when we think about the policy and the regulatory framework we need to have post 2030, or on the back of some of these consultations that we are waiting for decisions on—or waiting to even see.

To give a bit of colour on that difference of pace for oil and gas and for clean energy jobs, the ONS data shows that there are about 3,500 jobs going into clean energy every year. That will likely increase and we hope it does. However, we are seeing about 32,000 oil and gas jobs been lost over the last five years, certainly compounded by the EPL and the impact there. We have to manage this pace more effectively and allow for that transition, because the slower pace you are talking about of the renewable transition could be prolonged or made even worse if we do not manage that effective crossover from oil and gas jobs into clean jobs. There is a huge opportunity to be missed here, particularly for Scotland where most of these skilled jobs are. The only place that they could go is abroad or the skills just are not developed in the first place. We have to do everything we can to try to avoid that.

Good morning. This is to both Louise and Hebe. What engagement have you had to date, if any, with GB Energy?

We have had a welcome from DESNZ to introduce GB Energy in the first place, some months ago now. I have met the chairman, and I am pleased to see that Dan has just been made the interim CEO. I would say it is limited—it is light touch at the moment—but it is obviously early days for GB Energy as we wait for the Bill to go through and get Royal Assent. I assume that is targeted for before summer recess. We welcome the fact that GB Energy has decided to headquarter in Aberdeen. I know that was highly contested, as I understand it, and we look forward to understanding more about how it is looking to work alongside industry. I think there is an opportunity, if we get it right, for GB Energy to help derisk private investment and attract private investment. I don’t think GB Energy can do it by itself but it is an opportunity, positively, to collaborate with industry, depending on how the work is structured.

To start with, we welcome the fact that, as Louise said, it has landed and is headquartered in Aberdeen. Aberdeen is the heart of energy in the UK and it is certainly the heart of energy in Scotland, so that was the right decision and long may that continue. Our request to GB Energy will certainly be to engage with the sector and work with oil and gas companies, particularly on that jobs front, because we will be the skills and the sector that underpin that ability to transition at the speed that it wants. Without support to the oil and gas industry, that will not be possible. That is certainly our message to GB Energy and I hope that it will come forward and work with us as we certainly hope to support its ambitions.

In your view, what should GB Energy’s role be in respect of the oil and gas sector and in supporting its transition?

I think, Lillian, there is an opportunity for it to help underpin in different ways the supply chain and the opportunities for the supply chain to continue to work in oil and gas and to transition. I also think there is some opportunity potentially, thinking about the balance of public-private investment, for GB Energy to look at how it enables private investment. For example, I am thinking about infrastructure development where private investment might be more difficult to get it to flow, such as in developing port infrastructure so that you can have that as an anchor location for building offshore wind. You will have people who want to build offshore wind and developers like ourselves in that business but you need quite a lot of development done at a port to be able to deal with managing that and making it happen. It is thinking about where the leverage of that public facility could bring further private investment. For me, that is what makes most sense, given the scale of opportunity but also the scale of capital that needs to come in.

Additionally, GB Energy is going to be active on the ground, right? It is going to be seeing what we see day to day about working environments, the landscape, and the need for pace and fiscal and regulatory clarity. It being able to see it, feel it and work within that framework means that hopefully it will support us in feeding back to Government some of our core messages about wanting to see fiscal stability and predictability. Hopefully, it will become an advocate to support the oil and gas sector but also the green energy sector as well.

Finally—and you just touched on it there, Hebe, but I will ask it anyway—how can GB Energy successfully crowd in private investment in clean energy?

Yes, I think it is the point that I just made in thinking about where GB Energy gets the best bang for its buck in the sense of public money that enables and derisks private capital to flow in. That is the opportunity in my mind.

I will repeat, ultimately it is about supporting industry, so for oil and gas and hydrocarbon extraction companies, that is about the supply chain critically that will underpin both sides of the transition, and then allowing for us to manage a decline, not at a pace that we are seeing at the moment, to boost up the green technologies. That is what GB Energy can do and that is how it can help crowd in investment and bring about stability and clarity by advocating to Government the need for it to achieve their green ambitions.

We have two supplementary questions.

Yes, thank you, Chair. You will have to forgive me, Louise.

You have been on your phone; I was watching.

I have been on my phone.

You now know more than me.

BP have helpfully provided me with some information, which it would be remiss of me not to ask you about, given your presence here today.

Please do.

It states on BP’s website at the moment—it has just been released—that the intention is to increase oil and gas investment to £10 billion per annum. At the same time, investment in the transition businesses will be over £5 billion per annum lower than previously. Do you believe that that is going to help or hinder our ability within the UK to deliver upon our net zero aims?

As I said, Stephen, it is not going to change the activity set of all the investments I have described to you here in the UK. We are still a net zero company and endeavouring to be there by 2050 or before. There is going to be that 20% target to increase oil and gas production. The reduction is about BP capital, it is not about BP’s ability to encourage investment and finance into these activities. That is exactly what we have done with the offshore wind JV that we have announced in partnership with JERA that will stand up later this year. It is what we describe as capital light. By setting it up with that structure, it means that the wind business is not fighting for capital internally within the company, either in-country or globally. Capital is being overall reduced, as you will have seen in the press release if you have skimmed it, and what it does is gives the joint ventures, as structures and entities in their own right, the opportunity to look for different financing platforms and to leverage investment in different ways that you could not do within the BP disciplined capital frame. There is an opportunity, particularly when I think about our low carbon businesses, offshore wind and Lightsource BP—the solar businesses—to leverage more investment. It is not going to be off the BP balance sheet, but there will be more investment into accelerating the development of those businesses globally. As I said, JERA, when it comes together this year, will be a top five global wind developer. It does not hinder the transition; it creates the opportunity. It is a smarter structure with smarter access to potential financial support to go faster. Does that give you the answer?

Yes.

Just going back to GB Energy, bluntly, is this the best way to spend £8 billion of public money, in your opinion and with your experience in the industry? For example, Louise, you said that it was £18 billion that BP is investing, with two-thirds going into green renewables—that is £12 billion, so more than the £8 billion. Hebe, you said that speed and stability is more important than financial incentives. Is the money that the Government are putting into derisking investment the best thing we can be doing or are there things that we can be doing for a lot less public money that will actually elicit the same or different response from the industry that are already there using the skills and investment already existing? Or is this just a smokescreen that is going to eventually either attract different investment or drive investment elsewhere that could already have been there?

It is a great question, Harriet, and it is difficult to answer not knowing what their plan is. That is the thing that, as an industry, we are quite keen to understand. How do you want to work? What is it that you want to do? If as a company it was trying to replicate, for example, what private companies were doing, that would not feel like the best use of public money to my mind personally. As I said before, if it is about investing in certain things where you were less likely to attract capital, private capital, but leveraging that private capital—I used ports as the example—that, to my mind, could make good sense of trying to crowd in private investment and create jobs, economic value and growth. Without seeing the detail of their plans, it is a little bit difficult to go any further than that.

Understood.

I would agree. It is hard to comment without seeing and understanding what the ambition and aims are for the entity. Of course, anything that can be done to reduce customer bills should be sought after. There is a question as to whether this will support and help that, but it is hard to comment without understanding the full plans that I am sure GB Energy will set out in time.

Again, speed to get those things forward as quickly as possible is key.

Yes. There is an awful lot of lack of clarity at the moment that just means that people are holding off, not knowing and not being able to commit. The other thing that they could do is support the supply chain. We have seen the clean industry bonus for jobs, for example, more recently announced. That is orientated around trying to support the transition, as I understand it, which is very welcome, but it is also thinking about how we underpin and support the supply chain, keep the skills here and keep the capability here. Because while we, as operators, are investors, we are very reliant on the supply chain capability. We do develop a lot of the functional capability ourselves but the supply chain is important. It is important for both the oil and gas business and all the transition businesses because the skills are interchangeable.

We have focused a lot this morning on investor uncertainty and market uncertainty. I am more interested in employment. I will ask both of you, first of all, how many oil and gas job losses your businesses have experienced in the past decade.

I do not have the numbers for the past decade, but I can go back to, I think, 2020 and look over the last half of the decade. With covid and into the energy crisis, we reduced the workforce by about 30%. Then in the subsequent part of the cycle, more latterly in the last couple of years, it has increased back by 25%. You will appreciate the nature of the oil and gas industry is cyclical, so when you hit the highs and the lows that is how the employment pattern also shifts. It is also quite a transient workforce, as we talked about, in terms of the supply chain skills coming in and out of the industry. Broadly, we have about 1,000 people in our 2,000-strong team directly in BP. There are about 1,000 people in the North sea business and about half of those work offshore.

We are a relatively new company in comparison at Harbour but, as a result of the EPL, we have had to make the decision to cut 350 jobs. That is, similarly, just under a third of our workforce. Without the clarity, we are not able to say how much further that might go. Of course, if we are not able to invest and we are not able to produce, that does have knock-on impacts on job stats. Ultimately, we want to be able to see further production and hopefully work up and maintain our base here. We still continue to try to bring apprenticeships and young industry into the sector because that is critically important as well. We continue to try to promote the workforce there, particularly in Aberdeen, but it is having knock-on impacts and we have had to make decisions, sadly, as a result of the EPL.

How many job losses in oil and gas do you anticipate therefore in the next decade? What is your strategy to manage that decline, if it is to be a decline? How will you reduce that figure? What concrete steps is each company taking? Is it still to transition to job opportunities in the clean industry or are we seeing a shift away from that, based on today’s announcement, for instance, from your own company? It seems to be that the strategy has completely shifted. You had very ambitious climate targets. These seem to be being scaled back, if not abandoned, based on today’s announcements. What is the strategy for those future jobs and where do they lie?

It largely depends on whether we can get clarity on the conversations that we have been having this morning on the investment framework for the North sea. If we can get that clarity and the North sea competes for investment competitively, we can see a long-term future in the North sea, just as we have for the previous six decades. We can see decades ahead. That does not necessarily mean that there will be a reduction in our workforce. I understand where the assumption comes from, but I would not necessarily say that that is our view of what the future looks like. That is purely dependent on how investable the opportunities are, but we know the economic opportunities and therefore the jobs are there in the oil and gas business. What do we do in terms of workforce planning? Clearly, we pay a lot of attention as a company to the skills and the capabilities that we need. We look at the new businesses that we are going into. As I quoted to you earlier, 37% of the internal workforce moved into CCS, the hydrogen and offshore wind businesses, a couple of years ago from the oil and gas business, but we still need to retain a very robust, deeply capable and technically competent organisation in our oil and gas business because we will be doing this for a very long time to come. We will work towards delivering the transition in as smart a way as we possibly can. We retain the desire, the commitment and the ambition to be a net zero company by 2050 or sooner and we will workforce plan for the movement of those skillsets and capabilities into those different businesses at the time that we need to deploy them. That is the magic part to this delicate balance of the timing at which the oil and gas activity ramps up and potentially ramps down and the timing at which the low carbon businesses build out and are ready to operate, and we need to do it all faster. The decision making needs to be more pacey.

Quite, and I appreciate that it is a delicate balance, but earlier in your evidence, Hebe, you made reference to green technologies and said that you are desperate to roll them out. You also made reference to it not being a mismanaged transition. It seems as though today’s announcement is driven by shareholders rather than the transition—rather than the need for climate action. You are pushed to this decision, are you not, by unhappy investors losing out on profit and shares, rather than concentrating on ensuring future jobs?

No, we are not pushed by that at all. We have learned an awful lot in the last five years, as I said earlier, and we have made some major transition investments around the globe. I mentioned the bioenergy company in Brazil, our investments in biogas in the US, our full purchase of BP Lightsource as one of the top solar developers in the world, and the JERA Nex JV to create the top five offshore wind developer. Those are all fantastic investments in the transition. We did not have that five years ago. We have done and invested a lot. We are saying that we have to keep investing now to return to shareholders and build a stronger, more efficient company. We need to make sure that we are resilient to the pace at which the transition goes. If we are investing too quickly ahead of everybody else being ready to transition, that is not a good use of our capital investment opportunities. We are trying to adjust to the pace of this transition. I have said since I arrived at BP that this will be difficult. It will take everybody to move in concert to make this happen. It is not just the single decision of one company and what it chooses to do. I completely appreciate your point that it was very ambitious five years ago. We have learnt a lot in the last five years. We have invested in a lot of new businesses. I did not mention the EV business but that is another one of our transition businesses, which is seeing a lot of investment. All that will continue, but we just have to do this transition—from our point of view, we want to do it more smartly and more efficiently and try to get those returns for our owners because, yes, they are helping us to do that. If we do not generate those returns, we cannot reinvest and do more of what we are there to do.

To back that up, if we do not manage the decline, if we mismanage it, essentially, there is the possibility that we reduce the oil and gas workforce by 50% without there being the requisite jobs for them to go into. However, on the same side, at Harbour we are supporting and investing in the jobs of the future as well. If I speak specifically to what we are doing in the Viking project in Humber, we are partnered with what is called CATCH. It is a programme that looks to support and train 1,000 apprentices a year. That is our ability to be able to staff our future projects within the cleaner energy side as well. We are looking to make that transition but we need to keep bringing people into the oil and gas sector as well, to train them up. Those skills that they learn in the oil and gas sector are the same skills that they will need to deploy in the green energy sector, but we need that transition to happen at a smooth pace that allows for the effective landing spot for those jobs to be able to pass over to the green energy sector. It is not there yet. We are moving towards green energy but we are at a place where we still rely on 70% of our energy coming from oil and gas. That will not turn off overnight. We need to take the decisions that boost green energy, but unless we look after our oil and gas sector first, we will not have those jobs because they will go abroad.

Thank you both very much. That concludes our first panel. We will give a few minutes for the panels to change over. Witnesses: Russell Borthwick, Jenny Stanning, Becca Groundwater and Neil Gordon.

Thank you very much to the panel for coming along this morning and for waiting through the first session. That was very helpful. We will try to get under way as quickly as we can. I will ask each of you to introduce yourselves and give us a brief bit of information about the role your organisation plays in the North sea.

Good morning, Chair. Thank you for having us. I am Jenny Stanning, the external relations director at Offshore Energies UK. We are the leading trade association for an integrated offshore energy industry and we have about 420 members spread right across the UK but with a significant footprint in Scotland and north-east Scotland. Our members are active in upstream oil and gas exploration, production, development and decommissioning, but also in carbon capture and storage, hydrogen and offshore wind. Thank you for the opportunity to talk to you today.

Good morning, everyone. I am Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce. We are a place-based membership support economic development organisation. We represent about 1,300 businesses that operate in north-east Scotland. About a third of them are involved directly in the energy sector, but of the 70% that are not, many of those are indirectly dependent on a strong energy industry in that region, ranging from professional services to hotels, retailers, hospitality businesses and transport providers. This is very much about the extended supply chains and the risk to them if we deindustrialise too quickly and get our transition steps in the wrong order.

My name is Neil Gordon, chief executive of Global Underwater Hub. It is the trade and industry body for the subsea and underwater sector. It was formerly known as Subsea UK; we went through our own transition a number of years ago. We have 350 member companies across the UK that represent over 50,000 people employed in the industry. It generates about £9.2 billion to the UK economy; 38% of that is exports. The UK is recognised as the world leader in underwater engineering and technology. We are working across a number of sectors: traditionally oil and gas, and now offshore wind, wave and tidal, and aquaculture. It is all underwater engineering and technology. We have a base in Aberdeen, which is the headquarters. We also have a base in Newcastle, where there is a cluster, and in Bristol. Those strategic areas—where there are clusters—are where the future of offshore wind clusters will be, particularly in floating offshore wind. We see the main transition of the UK’s world-leading capability in subsea to be becoming the world leader in floating offshore wind in underwater. We have a number of forums that cover operators in oil and gas, developers in offshore wind, specialist areas such a cables, mooring and anchoring, and underwater operations and maintenance.

Thank you very much for the opportunity to come today. My name is Becca Groundwater, Head of External Affairs at the Energy Industries Council. We are a trade association that represents supply chain companies across all energy sectors: traditional oil and gas as well as nuclear, renewables, carbon capture and storage, solar and biomass—everything. We are energy agnostic, so we look at how they are integrated and how it is one energy system. We also help our members globally. We are headquartered in the UK but we have offices in all energy hubs: Rio, Houston, KL and Dubai. We look at and help our members export, we look at energy markets everywhere, and we protect those technologies going forward.

That is very helpful. Jenny, what is your view on the UK Government’s position not to issue new licences to explore oil and gas fields?

We should look that question in the context of net zero and it is important to set out that context. There has been a lot of international and some domestic commentary on net zero and whether we should back away from that. I would like to be clear with the Committee that the members I represent are fully committed to playing their part in delivering net zero by 2045 in Scotland and 2050 across the UK as a whole. We think that there is a role for oil and gas in that transition and we also think that granting licences for oil and gas activity is compatible with that net zero journey. Therefore, the quick answer is that licences are important and we think that they should continue to be awarded, subject to robust climate checks. Let me explain why they are compatible with that net zero journey. About 75% of demand for energy in the UK is met by oil and gas. It is our view that if we still demand the product, and if we still need the product, we should make the most of our home-grown oil and gas industry. This has a significant economic impact on Scotland and the rest of the UK. It generates about £15.2 billion worth of GVA to Scotland in 2023 and it supports 90,000 highly skilled jobs across Scotland and 200,000 jobs across the UK. The UK has been a net importer of oil and gas for some years now, so if we do not maximise our domestic production we just have to import more. Imported oil and gas, as you have heard from previous witnesses, is produced at a higher carbon intensity elsewhere than we can do here in the UK and in Scotland, but it also pays no taxes and it does not support any of those jobs. That is why I think that ongoing activity and licences are important.

What outcome would you like to see from the consultation on the North sea oil and gas licences policy? I think I can guess but I will ask anyway.

If the UK Government wish to change the position on licensing, we would ask that they publish that consultation quickly. You have heard from previous witnesses about how important certainty is for investors looking to make longer-term capital-intensive investments in the UK to support activity and jobs. We would like to see, if we are going to have a consultation, that consultation published at pace. In terms of what is in that, just as I said at the start, we would like a pragmatic approach to delivering net zero and one that looks at the opportunity that comes with net zero. Yes, it will be challenging but you have a wonderful sector here across part of the energy space that you will hear more from all the witnesses about. There should be a role for all parts of that sector to deliver net zero. Licensing is part of that and we would ask that a pragmatic approach to licensing is included in that.

Good morning, everyone, and thanks for coming. Mr Borthwick, recently the AGCC described the extension to the windfall tax as “reckless”. Earlier we spoke about the energy crisis that faced companies that have made excessive profits in the last few years. Given so many are still experiencing high bills, can you appreciate why the UK Government have made the decision to continue addressing what appears like an unfair balance between customers and the companies?

Thank you for the question. We need to be careful not to directly link the energy bills of domestic consumers with oil price, for example. There is not a direct link between those two things. Our call came on the back of the fact that we do not believe that windfall conditions exist in the North sea today. The oil price is around $72; the 15-year average is $78. That is not inflation adjusted. At the same time, compound inflation and therefore the cost of recovery has gone up by about 36%. There are no windfall profits being made. Celtic football club made more profit in 2023 than Harbour Energy, the biggest North sea producer. Every other nation in Europe that briefly introduced windfall taxes because of the Russian invasion of Ukraine very quickly took those away. We believe that having it in place is limiting the confidence of the investment that you heard about from the first panellists this morning and stopping activity happening in the UK. We have a very simple choice to make. The UK needs 15 billion barrels of fossil fuels out to 2050. At the moment only 4 billion of those will come from domestic production. We have the opportunity to make that 8 billion at much higher value—as Jenny said a moment ago—to the economy in terms of retention of jobs, investment, and return to the Exchequer. We know, and the Climate Change Committee reminded us again this morning, that that is much cleaner than imported gas and oil. We have some choices to make and the opportunity is to wrap all these questions into a cohesive industrial strategy, because at the moment we are heading towards deindustrialising the nation when we have a major opportunity to reindustrialise it.

I had another question that would have been a caveat to that but I will not go into that. What is your assessment of the industry’s progress towards the North sea transition deal’s targets?

We heard this morning from the Climate Change Committee that the industry has been decarbonising very quickly. It is great that the UK is taking a leadership position and it is right that it does that. The UK is responsible for about 1% of global carbon output and 3% of that 1% comes from North sea production. There is a lot of talk at the moment about scope 3 emissions. I will take you back to the maths classroom, which is probably not a welcome thought. When we are doing equations on inequalities, if you had a constant on either side of that, you could take it out. What we have is that scope 3 is simply about end use. We need energy to light and heat our homes, our hospitals and our schools, to keep the country moving. Therefore, the question we have is a very clear one. Do we want to take domestic production with much lower scope 1 and scope 2 emissions or imported LNG from the despotic regimes that the Energy Secretary says that he does not want to do business with, rightly, or do we want to maximise our resources in the UK? That is the question that I would put to the panel.

Could I add a comment to the North sea transition deal? Russell has outlined some good progress on decarbonisation. It is important to know that we have met that first decarbonisation target, which is a voluntary target between the industry and the Government. Our regulator, the North Sea Transition Authority, thinks that we are on track to meet that headline target for emissions reduction of being a net zero basin by 2025. The North sea transition deal will be four in about two weeks’ time. You asked about how we are doing on progress towards those targets. Decarbonisation of the operations of upstream oil and gas is one important part of that, but there are other parts to the North sea transition deal that the sector has been working hard on, things like our world-class supply chain, which I am sure that we will come on to talk about. How do we support investment in that world-class supply chain? We have worked with Rystad to map the capabilities of our existing oil and gas supply chain and how that maps across, particularly into floating offshore wind. I would be pleased to provide a copy of that report to the Committee for you to read if you would like—some bedtime reading for you all later. We have launched a supply chain investment taskforce that is looking at how you secure anticipatory investment into that important supply chain for new energies as well. We have secured funding for the Centre for Doctoral Training, which is important when we think about geoscientists and how pivotal they will be, particularly in the areas of carbon capture and storage. Last month we launched the first iteration of the skills passport, which was an important commitment from the North sea transition deal. It was highly ambitious and when it was launched was transformational, but we all accept that there is plenty more to do.

Thank you all for coming. What role do the UK oil and gas companies and the extended supply chains play in driving us towards the energy transition and cleaner energies, and is there a balance that can be struck? Can we quantify that between the reduction in oil and gas, and the speed of that reduction, versus the scalability of renewables and getting that balance right?

In Scotland we are looking at 84%, 87% and about 86% of our supply chain companies that are in wind, CCUS and hydrogen respectively that have come out of oil and gas industries. What I mean by that is that they are oil and gas-based industries that have moved into these other sectors. We find that the energy supply chain is not one thing. When we talk about these new technologies, we tend to look at them in a silo. Actually, they are delivering across the board. That ties in with what we heard earlier about needing that managed project delivery, because if you are a company in oil and gas but also in wind—Neil, I am sure that you can talk to this as well—and you have that 13-year time lag but you are doing more than one thing, you have to finance the transition. At the moment the only way to do that is through the oil and gas technologies. In Scotland we have this crossover of technologies. In the rest of the UK what we see is the more stand-alone organisations, so it will be just in CCUS or just in hydrogen. With them we are seeing that they have the initial investment and they may get off the ground but they then struggle. First, there is not that longer-term financing strategy and there is not the project delivery, or it is coming in numerous years, which is not enough to sustain the delivery and the capacity building of those companies. They then look elsewhere, because we have international markets. If they are operational in hydrogen and they see the market delivering in Australia, with the risk factors, risk profile and finances there, we are seeing that capability leave the UK to go to these other energy markets. That would set the scene for how that transition and supply chain develop.

If I could add to that, the energy transition we have talked about, which is a statement that we have used for a long time, is moving from one fossil fuel-based energy system to renewables and that is the transition. It is moving over a long period of time. We have almost treated it as if we are trying to switch. “Switch” has often been used by the supply chain, but we cannot switch; we have to make that move over a long period of time. I mentioned last week in our flagship event in Aberdeen that that is the gap between one state energy source and the other, and we are not managing that gap. We are not minding that gap very well. We can make that move if we want to move from one energy to the other, but we are not looking at the industrial impact. We have to understand how we can move our industrial capability across to deliver a lot of that new value. The challenge that we have is that 89% of our member companies are already working across multiple sectors, and 92% say that they will when the time is right. There is ambition, there is investment and the conditions need to be there, but the project pipeline is the key thing. If we are moving from oil and gas to renewables, let’s say—on that gap—if we decline the project, the capacity and capability of our supply chain will decline quite a lot. When we move across towards when we want to achieve that net zero target, the capacity and capability will not be there, so that target will start moving to the right again. There is a danger that we will lose out not only to ourselves but to overseas supply chains because they will be watching very carefully and we will end up being a custodian to other people’s technology. It is key now that we look at the industrial strategy to ensure that we can start building for the five, 10 and 15-year opportunities that are coming around. There is no doubt that we do have the capacity and capability to do that but the conditions for investment are not perfect. I am sure that some of the opportunities may be through GB Energy. How some of those steps could be derisked in the investment will come out later. However, it is the bathtub effect, so we have to try to close that gap and try to manage that transition and the timing of it. It is taking a lot longer than has been anticipated. We do not have a very good history if we look at our shipbuilding, steel and coal industries. We have managed to shut down industries but we have not been very good at managing the industrial opportunity. We missed out hugely on fixed wind and getting supply chain capability in the UK. We have a big opportunity now as we transition into floating offshore wind where we do have a lot of capacity and capability in the underwater space. Let’s focus on some of the areas where we can compete and be world leaders, but it does need a concerted Government effort to get behind that.

Douglas was asking about jobs previously. I want to remind the Committee that about 200,000 people in the UK have a dependency on the energy sector for their living, with just under half of those in Scotland. The interesting point is that often people talk about oil and gas giants. Only about 10%, perhaps fewer now, of those 200,000 work for operators. The rest of them work largely for SMEs, often referred to as the supply chain. It is the best in the world. As other panellists have started to say, we are seeing evidence of this happening because we are decelerating traditional oil and gas work, which has been their staple for many years. Because the scale and profitability of work is not there in renewables, we are risking lots of those jobs or we are seeing it taking flight overseas because other energy-producing nations are turning to Scotland and turning to the north-east of Scotland because they understand that we have the best skills and the best resources in the world. Therefore, that will not be present in the North sea when we do start to ramp up our renewables ambitions here because it will be deployed elsewhere in the world. That would be the wrong thing for the country, I believe.

I have one last point, if I may. We often talk about oil and gas being with us for decades to come and the supply chain being anchored in the UK. These are brilliant sentiments and great ambitions to get after, but we must not be complacent about that. Just as fellow panellists have said, our supply chain is the envy of the world and they are actively encouraging companies to move elsewhere—to go and base themselves elsewhere in the service of an energy transition elsewhere. These people we talk about, the 200,000 across the UK and 90,000 in Scotland, are brilliant engineers, technicians, scaffolders and welders. Their jobs are in demand elsewhere and we have to make sure that we are irresistible for investment here in the UK to sustain that supply chain here.

Building on that, Jenny—that is helpful—how does the profitability or otherwise of oil and gas companies help or hinder our transition into green energies and so on?

It is essential that oil and gas companies—by that I mean the operators, the developers and the supply chain—all need a revenue stream to fund their expansion into new and different energies. The projects are not there yet at the scale to keep these supply chain companies going in the UK. An ongoing pipeline—we talked about stability and predictability—of predictable activity will keep the companies and the jobs anchored here in the UK now so that we are ready as we scale up projects in wind, in hydrogen and in carbon capture. It is essential.

Neil, I have a quick follow-up on floating offshore wind. You said that it is a real opportunity for us. Can you expand on what those opportunities are and what challenges there might be as well that might stop us reaching those?

Floating offshore wind is quite different from fixed. Fixed is above the waterline, essentially, but the turbines, towers and so on are the same. Now that we have taken them into deeper waters going into floating—when you are in 60 metres or more, which means large structures the size of football pitches, and thousands of tonnes—it is very difficult to manage and install. However, that is what we have done in the UK over the years, not only here but around the world. The underwater technology is how to move the electricity around underwater when you have created it—the cables and the systems. It is not just the cable; it is the materials and the research into new materials such as copper and aluminium, and how we improve the distances and the losses. The floating ones will have dynamic cables in the water column that will have a lot of different forces that can be designed from some of the science and engineering that was developed in oil and gas from cables that were used for powering subsea systems, and for mooring and anchoring systems. We look at these large structures, which are the size of an Eiffel tower—up to 100 of those—with huge chains, mooring systems and anchors. All those have to be developed. If we think of traditional methods of anchoring those to the seabed, it is not feasible with the amount of steel and chain and so on. Therefore, things like new synthetic ropes need to be developed. We have the capability across the country. We can research scientifically and develop, with the universities, through the High Value Manufacturing Catapult network across the UK and we have the testing capabilities through the catapult in some of these areas to bring these into place. However, those are quite risky steps for a lot of companies, because the technologies may not be needed for a number of years. How do we bridge the gaps and the risk in investment for those companies to build the factories, to invest in the people, to research and develop, because that return on investment may be some time away? The underwater part is the cable systems and all the associated parts with that. We can move electricity around the country and land it in other parts of the country as opposed to taking it to the nearest landfall. We can do it over longer distances. The actual surveying of the seabed, maintaining and operating robotics, will all play an important part of maintaining these fields. Some 80% of the world’s wind in the future is predicted to be floating offshore wind. It is happening here in the UK first, with the first industrial scale one being Green Volt, developed by Flotation Energy just off Aberdeen, which will be a 35 turbine development. It is now in full motion of getting it developed in the next couple of years. It is taking probably quite a lot of the risk in some world firsts, and we have an opportunity to help some of that in the UK to be that world first and be the leader, as well as developing broader-scale opportunity right across Scotland and the UK.

May I give a quick anecdote to back that up? You mentioned the Port of Aberdeen earlier and I want to come back to it, with an example of that lag in investment and return. There was £420 million of private investment in the UK’s largest new port in 100 years. In 2023 they were pleased to see that 10% of their business, their traffic, was offshore wind-related. That translated into 1% of their revenue. That simple snapshot demonstrates that big investments are being made but the returns are not there quickly enough, so we still need a balanced portfolio of other work for the supply chain, otherwise it will not be able to be sustained.

Neil, I think that you have answered this question but I will ask it anyway. What more can the UK Government do to encourage greater domestic supply chain investment?

If we are going to make a difference—I look at what we have done in fixed wind and we have ended up being a caretaker of a lot of overseas technology. We have not created the jobs. We have not created the technology firsts here. How do we look at that? We are very good at supporting small technology investments. I think that we have to be much bolder and much bigger in our ambition but look at where the opportunities are. We focused on creating through the CfD process, which was very successful in bringing costs down, but that has driven value out in the margins and so on, which has made it a very difficult place to make money. However, if we look at where the opportunities are for UK and Scotland to invest, we have to pick the winners. It is pointless in being a “me too”. There has been a lot of talk about ports. We have to look at where the developers and the developments will be and then look at almost an integrated system development, because no one port will be able to deliver everything. We have to look at what the requirements are. For example, some ports may be more suited to marshalling and installing. Some of these big structures will be fabricated in sections and come in from other parts of the world. They will be assembled and managed very carefully here. Cables may come in from different parts. For mooring and anchoring, the service bases may be in different things. Therefore, we have to look at a much more systems-integrated approach to these projects and we do not have that view yet. However, if the Government are to do anything to help, it is industrial-scale technology view, and certainly in the underwater space we can capitalise on that. That is the next biggest industrial opportunity, I think, for UK plc and Scotland plc in floating offshore wind. We have to realise where we are competitive and where we do have the infrastructure, the people, the skills, the universities, the testing and the research facilities to be that world first and to lead in that space.

The other piece that the Government could do for our domestic supply chain is to promote it. We have all spoken about the capabilities that exist in the oil and gas sector and the burgeoning capabilities that exist right across the sector. It would be good to see the Government out there using that amazing network of embassies and overseas trips to promote that capability to overseas investors as well. That would be one specific that they could do to promote that. Industry is also doing some existing things to promote our own domestic supply chain. We are looking at procurement, for example, and how we procure properly in the UK and take the lessons from existing industries like oil and gas and translate that into new industries as well, so that they can learn from our mistakes of 50 or 60 years of developing that system. It would be good to see the Government getting behind that and supporting that cross-sector learning.

Becca, the Energy Industries Council has called for an integrated supply chain. What does this look like and how can the UK achieve that?

I will go back to the example I gave whereby companies are already doing more than one technology and the conversations that we have around that. We work across lots of skilled groups, taskforces and Government groups, and we all work together as trade associations, but the conversations are very siloed. What is not taken into account is that these companies will be expected to deliver across everything. That industrial strategy, as Neil talked about, works backwards. This is what we asked for during the previous election on setting out 2050, setting out 2030, and looking at the pinch points and how we can help the supply chain grow now to deliver it across. If we take one company that is operational in oil and gas and carbon capture, because of the success of moving into carbon capture, it has gone from an SME into what counts as a large corporation. It has now had all its funding for new technologies and renewables pulled—it does not qualify—which means that it cannot remain competitive in the new technology. It is reverting back to oil and gas and it is looking to international markets to keep the money coming in to be able to be competitive in the new technology. Unless we have that understanding of what the supply chain is and how it works and how it operates, we miss how we help them. I agree with Jenny that we need that global recognition, but unfortunately Government policy does not support that. They are not allowed to help typically fossil fuel companies in-country and are not allowed to talk about them. That is hurting our supply chain because it is doing it alone. We also have the skills and the jobs. I am always the negative one in the room. Unfortunately, when you talk about an industry, and we do not support it but we look at ways to manage the decline and we look at ways that it could be better and what we need to move to, we are then surprised that people do not want to go into that technology. We have heard about geoscience and we have heard about the skills that we have that could go elsewhere, and the jobs. If we are not encouraging people in to recognise that energy is this, this and this, we are already missing out. We see that with the universities. The integrated supply chain is pulling all these threads together. Apprentices are brilliant and the work that we do in our constituencies is brilliant, as well as what we are delivering for net zero and the fact that these small SMEs and these community places want to deliver net zero. Do we think that it is achievable? No, because this is about integration and understanding how we drive that forward and how it makes a difference from one to 2050. We have to get that understanding and recognise that the companies need help, not just against oil and gas but to be great at everything, because that is our legacy and it is what we will deliver going forward and build on. It is pulling all that together—the expertise across the board—and recognising that when we talk the supply chain, it does everything and wants to do everything and is amazing in the UK.

Going back to Russell and your previous comment about the workforce, there are 84,000 jobs in the oil and gas sector and we do know that the Government are committed to supporting these people into clean energy jobs and into the industry. You said that some of these people are going abroad and going overseas. Am I correct that that is what you said?

We are seeing, and other speakers have reflected this, that if you are running a supply chain business now that has depended on traditional fossil fuel activity for the last number of decades, and because we are artificially accelerating the decline of the North sea—more quickly than I believe needs to happen; I gave you the figures on that earlier—there are two choices. You either need to leave the industry altogether or you need to find work where work exists. At the moment that can often be in other energy-producing nations, which turn here because they know that we have the best skills in the world. We are seeing that start to happen.

Thanks for clarifying that for me. With the workforce that you have, does more need to be done to train and recruit these people to meet the targets that we are going forward with?

The general consensus is that the people who we have in the sector at the moment have highly transferable skills. What we do not have is the work for them to do. That is the challenge. Where we are seeing challenges is particularly because of pressures on universities and some of the rhetoric on fossil fuels and oil and gas. Many universities are paring back or stopping altogether the delivery of many degree courses that have traditionally taken young people into the energy industry. Because of the uncertainty around it, our most talented young people are choosing not to go for a career in energy, when we need them because they are our climate solution. A lot of negative rhetoric has led to a reduction in the opportunities for the future workforce, not just the opportunities but the career ambitions. They are saying, “Why would I want to have a career in that? I’m not sure where it goes. Oil and gas is bad, isn’t it?” The current workforce is highly transferable and there is not enough work. We need to give them the work, but the future workforce is a concern for me.

There is an excellent report by Paul de Leeuw of Robert Gordon University that puts some statistics on when people can move from one part of the sector into another. He talks very compellingly about the goldilocks zone. We need to get to where it is just good—just perfect. That goldilocks zone is important when we are thinking about reskilling. That report also shows that there is about a 90% transferability between oil and gas skills and the new energies, particularly in places like carbon capture and storage. Carbon capture and storage is obviously very important if we are to meet net zero by decarbonising rather than deindustrialising the UK and Scotland. We will need new entrants into energy, of course we will, because this transition will take decades. There are jobs in new energies that we do not even know about yet. That should be really exciting. Russell is right to say that we should get our universities and our colleges to find energy exciting. We should get our schools to find energy exciting for that next generation so that they want to come and work here if we have the jobs, the projects and the activity for them. Let’s also not forget our existing workforce and the great role that our colleges and our current apprentice schemes do as well. It is very important that they are supported.

That might be a task for MPs to get out there and see if we can get people to have that opportunity.

The sector would love to see Committee members out and about talking about the positive opportunities that exist. That is a wonderful thing to do.

My substantive question was going to be about skills; we have talked a lot about it already. What skills does the clean energy sector and its supply chain need from the workforce and what needs to happen for employers to invest in those? We have covered lots of it but I will give you the opportunity to add any comments that you have yet to make. My supplementary, Jenny, is about the energy skills passport and when that might be operational. Can you tell us a bit more about that?

I am happy to. We have talked a little about what employers need to invest in skills. If I take you right back to the evidence session you had beforehand, we need good stewardship of our existing assets, a good regulatory framework and an attractive investment environment so that companies put their money here in the UK, support jobs now and support jobs for the future. A pipeline of predictable projects coming through will allow people to anchor their companies here. Providing high-skilled jobs for the future will let us invest in skills. To your specific point about the skills passport, last month we launched a limited version of the digital energy skills passport, which allows employees to upload their qualifications and their skills to a digital passport. It will throw up opportunities for them to look at and training opportunities. That is limited; it is phase 1. It is a good first step and we have worked in partnership with RenewableUK, a great example of cross-sector collaboration. We very much welcome the support from the UK Government and the Scottish Government in delivering that as a first step. Phase 2 will come in the next few months, later on this year, and we are looking at where else it goes. We are currently looking just at oil and gas and at wind but the possibilities are endless. Becca has talked very compellingly about it being energy agnostic. There are multiple different parts of offshore energy and onshore energy that could be part of that skills passport. A last point from me on the skills passport, proud of it though I am, is that it is but one tool in a toolbox. It will not on its own solve or deliver a just transition and support those workers who are looking at where they go next. There needs to be one tool and there need to be many other levers pulled by the sectors and by both Governments.

To put some colour behind the reports that we hear about, and the work that we hear about, there is one company, one of our members, that had a contract for a particular technology and employed numerous people—hundreds of people. The contract was paused because of policy and regulation. This SME was then on the hook to find somewhere else to deploy all these people who had signed contracts. This SME takes the hit and the next time policy stabilises out and they have the opportunity they look at it and say, “I could go here, but I could go to this emerging market where I know that they are going to use me and I know that half of those people who signed the contracts to take on that employment will move and I am then keeping them that way.” I was talking to the same company on investing in new technologies. It said to me that it would cost £20,000 to put somebody through a year’s training, which would then have them in this separate technology. There is no guarantee that the project of work will be there in a year. If it trains up this particular skillset, they will be pushed by higher paying, bigger companies, potentially globally. Therefore, that company again misses out. Unless we have that pipeline of projects coming through and we know where they can go and when, we are asking small businesses to absorb a cost that they cannot compete with. That just adds a bit of colour to what we are talking about.

What we have done in the past with skills is talk a lot about what the industry needs when I do not think that we have consulted with the industry enough. A lot of it has been done by a push, “Let’s get 100,000 people ready because we think there are going to be 100,000 jobs.” We need to engage more with industry, when it is ready, and do a bit more of the pull through. That is where we are focusing our efforts at the moment. Companies will say that they need X number of people. We can sometimes line up those people and prepare them in the skills, but when it comes to it perhaps they do not have the right skills. Therefore, there is a bit of a mismatch in the projects going on. I would like to support Becca’s point about smaller companies taking on apprenticeships and graduates and then they get poached by bigger companies. There is a real call to ask how we can bring more of the younger generation into the industry. Yes, we need to be more attractive and we need to sell the industry—it is very transient, it is very diverse and it is a global opportunity—but we also need to think about how we can help those smaller companies through those apprenticeship schemes and through the graduate programmes so that more people can be taken in. I recently had a meeting, a roundtable, with a number of companies that employed about 5,000 people between them. They said that they could probably double that if they could derisk the challenge of having those big intakes of apprenticeships and graduates. I am not sure what the answer is completely, but with more support you could bring more people in and then smaller companies would probably join the party and be able to help take more people in as well. It is a big investment in time and money for them.

We have talked about integrated supply chains. We need to talk about integrated energy policy. This is where I come back to the industrial strategy again. A model industrial strategy has sectors and industry, it has the places that power those, and it has the skills behind them as the three main ingredients. It is important that we start a discussion on how we design an industrial strategy that holistically takes all those things, because at the moment it feels like policy is very piecemeal. There are lots of statements of intent but they do not join up. That is what is lacking here and that is one the reasons that the British Chambers of Commerce set up the North Sea Transition Taskforce, chaired by Philip Rycroft, trying to take a cross-societal view across a common ground of how we take a different approach. It has become very toxic. It is the most complex issue that we have wrestled with as a community, maybe even since the industrial revolution. It feels that it needs more joined-up, grown-up thinking than it is getting at the moment. That is what we would like to see in an industrial strategy focus.

Can I ask Jenny a quick follow-up on the energy skills passport? Have the Government been involved at all in the passport development and would you like them to be or not? Maybe not; it should be business led. Is there any way that you would want more Government involvement or improvement in that?

I am so pleased that you asked me about Government involvement in that, because that is what I was going to come in on. Yes, both Governments have been involved—the Scottish Government and the UK Government. That is important. You are right to say that it should be sector led, but the support of both Governments is important because that helps us work across the sectors and it shows how seriously we are taking this. A particular ask of Government involvement going forward builds on some of the points that my colleagues on the panel have made, which is that we would like to see a cross-sector, integrated workforce demand model. That means that when we are planning for skills and where we need to focus, we are not taking essential skills from another part of the economy. It plays on what Russell was talking about—having an integrated industrial strategy. It would be fantastic if we got all the highly skilled engineers and welders that we need for offshore wind, for example, but not if that comes at the expense of key infrastructure projects for the rest of the UK. That is where the Government can play a role. They can bring their cross-sector view—a more holistic view of what is going on in the rest of the economy—into planning things like the skills passport.

What could we learn from other countries about how to best manage a transition from fossil fuels to clean power?

We have been very quick off the blocks if we are looking at the energy transition and ambition. We are leading the world in a certain sense, but when we look behind everyone else is saying, “Hang on, how fast do you need to be?” We need to take a look back and say that we have maybe taken a step too fast and too quickly. Other countries around the world—I know that it has been publicly noticed in places like Canada and Brazil—have said, “Look at the UK and learn from their mistakes,” because we are making mistakes at the moment. They are following and looking at how they can manage their transition. We often look to Norway as a very good example of how it transitions. It has big ambitions to transition and is a very clean country and its reputation is very strong, but it is still a strong oil and gas producer. However, its ambitions are to transition. It sees the long-term investment in renewables but at a pace that is managed, just and fair for the country. There are some examples around the world but a lot of other parts of the world are talking about the beginning of their journey in transition. We are right in the middle of it, quite well down the road, and we need to take a look at ourselves because there are not many great examples around the world for us to follow—we are leading from the front at the moment.

Can I pick an example of what not to follow? It is sometimes important to learn lessons from what has gone wrong elsewhere. I would like to pick up a nation that went down a very similar path to where we are heading at the moment, New Zealand, a number of years ago. What happened was, for the right reasons in trying to do what it was doing, it accelerated too quickly. What that meant in New Zealand was power shortages, power outages and significantly increased consumer bills, which is something that everybody is trying to move away from, and there is now a reversal of the Bill that is encouraging domestic gas production again. “New Zealand needs to invest in getting the most out of our existing fields and in exploring new fields”—that is a quote from the Government on the Bill that is going through. Therefore, it is important that we learn from best practice and worst practice, because sometimes there are unintended consequences from trying to do the right things but doing them in the wrong order or doing them too quickly.

A quick word on that one. If we are on a riff of looking at what we should and should not do, we have our own example of how not to transition, if you look back to the transition from coal to gas and at some of the communities that were badly affected by that transition and are still affected today in terms of the economics in the local communities and how people feel about the transition. We have an opportunity to do better. There are some global examples of where we can do better. Germany has some good examples of retraining people in fossil fuels into new energies. As Russell says, New Zealand is a great example of a rush to end licensing for oil and gas, which is the example that Russell was talking about, and then having to reopen licensing. However, that was too late because operators did not want to bid for new licences because they had already exited the basin and taken their supply chain with them. We must learn from these examples and we have a duty and an obligation to the people who work in the sector to do better.

You just answered my substantive question, but I have another one. Is there a risk of investment in clean power going overseas if the UK and Scottish Governments fail to maximise Scotland’s potential?

The very short answer: yes. You have heard from us all that, yes, there is. However, we have such a wonderful opportunity, an economic opportunity, of net zero and clean power if we get that right. We have the people, we have the organisations, we have the geology, we have the environment and we have the political will and a sector that wants to get involved and actively wants to be part of that. The opportunity is there.

It is not a risk; it is a reality that is starting to happen. We have a very short window, as you have heard throughout the day, to look at what our decisions are and to look at what our direction is, because if we do not get that right very quickly, that will accelerate.

Our companies want it. They have a legacy because we are a legacy basin and we have that expertise. The companies that are here want to stay here. However, at the end of the day they will go where they can be best utilised.

We are competing for global cash and, a lot of these times, for investment. When the UK set off on the CfD process in offshore wind it was a very attractive basin, but there are other basins around the world that are catching up fast. We do not have all the capability in the UK. We do still rely on the international supply chain as well as the UK supply chain, but the plan should be how we can make more in the UK and how we can create more jobs in the UK. That is the key thing that we have to address, because if we can make it an attractive place to come and do business, we can attract the investment, but we also have to attract the talent for the future. If we talk about the whole energy industry, we are all busy and there is a lack of skills and people, but we are not having that pull through of new talent because there are not the skillsets there. We are competing very hard for that talent but we are not doing a very good job of saying that this is an industry that has huge potential and attraction. We work with primary schools and secondary schools. We are running a STEM returners programme with ECITB. All these programmes are great but they are not at the scale of what we will need for the future. Today smaller companies think they are busy, but it is just over the horizon that we can see problems coming. On one hand the companies that have the diversity to be able to work in both renewables and oil and gas are good because they can balance that. This is very much a balancing act as we go through the transition. For some who are more heavy in oil and gas, there are redundancy letters going out at the moment and we will see some of that happening over the next few months.

That is the end of our questions. Thank you very much for all your contributions this morning. It has been very helpful to our inquiry and we are very grateful to you. With that, I will close the meeting.