Plan to expand North Sea oil drilling announced – as critics slam Rishi Sunak’s ‘culture war on climate’
The prime minister has announced an expansion of oil and gas drilling in the North Sea amid ongoing rows in his party over the future of its climate commitments.
Number 10 said hundreds of new oil and gas licences will be granted off the coast of Scotland to “boost British energy independence” and “reduce reliance on hostile states”.
The move puts down a marker between the government and Labour, which has proposed a block on all domestic new oil and gas drilling as part of its strategy to achieve zero-carbon electricity by 2030.
Shadow climate change secretary Ed Miliband accused Rishi Sunak of lurching towards “a culture war on climate” to make up for “13 years of failed Tory energy policy”.
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But Mr Sunak and his ministers have stressed the need to use North Sea fossil fuel resources, especially since the Russian invasion of Ukraine.
The North Sea Transition Authority (NSTA), which is responsible for regulating the oil, gas and carbon storage industries, is currently running the 33rd offshore oil and gas licensing round, and they expect to award more than 100 new licenses in the autumn.
But such moves have prompted alarm from climate campaigners, with the government already facing opposition to any development of Rosebank, 80 miles northwest of Shetland.
The head of Oxfam Scotland, Jamie Livingstone, called the new licensing rounds a “short-sighted and selfish decision by the UK government” which “flies in the face of climate science and common sense”.
He added: “The UN has made clear that we must end our global addiction to fossil fuels, so this decision sends a wrecking ball through the UK’s climate commitments.”
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Government needs to pursue net zero targets – Lord Deben
The prime minister has also confirmed locations for two new carbon capture usage and storage clusters ahead of a visit to Aberdeenshire today – where he is expected to announce multi-million pound funding for the schemes.
Carbon capture sees polluting fumes collected to either be used elsewhere or stored underground instead of going into the air, and is seen as an increasingly important tool in achieving net zero.
The Acorn carbon capture project in North East Scotland – a joint venture between Shell and other firms – and the Viking project in the Humber will be “vital to driving forward and investing in clean technologies that we need to realise our net zero target”, Downing Street said.
But while ministers predict the move could support up to 50,000 jobs, the target for the two new sites to be up and running isn’t until 2030.
‘We’re choosing to power up Britain’
Ahead of his visit to Scotland, Mr Sunak said: “We have all witnessed how Putin has manipulated and weaponised energy – disrupting supply and stalling growth in countries around the world.
“Now more than ever, it’s vital that we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy to British homes and businesses.
“Even when we’ve reached net zero in 2050, a quarter of our energy needs will come from oil and gas.
“But there are those who would rather that it come from hostile states than from the supplies we have here at home.
“We’re choosing to power up Britain from Britain and invest in crucial industries such as carbon capture and storage, rather than depend on more carbon-intensive gas imports from overseas – which will support thousands of skilled jobs, unlock further opportunities for green technologies and grow the economy.”
Mr Sunak will meet energy industry leaders during Monday’s trip. Pic: No 10
SNP Westminster leader Stephen Flynn said it was right to be “conscious of energy security” and keeping the large oil and gas workforce in Scotland employed, calling it a “silly position” to end all drilling.
But speaking to Sky News, he did not give his full support to the new licenses, saying Tory plans to “take every single drop” from the North Sea was “a little bit morally bankrupt”.
He added: “We need to be conscious of the fact that every single drop of oil or indeed a molecule of gas that we take out of the North Sea will have a concurrent impact on climate change.”
Mr Flynn called for “robust climate compatibility checkpoints” to be put in place for any new licenses.
Meanwhile, Labour’s Mr Miliband questioned whether the prime minister was the right person to make the decisions over future energy security.
“Every family and business is paying the price, in higher energy bills,” he said. “It is absurd that having left this country so exposed, the Conservative Party is asking the public to believe they can fix it.
“And it’s telling that while Labour focuses on lower bills and good jobs, Rishi Sunak lurches desperately towards a culture war on climate to appease his split party, losing track of what he believes from day to day, depending on which faction he’s met with.
“It’s no way to govern and it’s costing working people.”
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A new green dividing line in politics?
The move comes as both main parties continue to argue over their commitment to key net zero policies and environmental promises.
The Conservatives’ narrow victory in the Uxbridge and South Ruislip by-election opened a can of worms within Labour over London Mayor Sadiq Khan’s plan to expand the Ultra Low Emission Zone (ULEZ) to outer boroughs – something Sir Keir Starmer blamed for the loss.
The Labour leader and Mr Khan are continuing to hold discussions over the extension, with Sir Keir calling on his colleague to “reflect” on the impact on voters.
But Mr Khan has stood by the decision on the basis it will improve air quality for five million people in London.
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Sadiq Khan: ULEZ decision ‘good news for London’
Meanwhile, MPs on the right of the Conservative Party are appealing to the PM to rethink the government’s net zero commitments in light of the win, with calls for delays to a number of targets – including putting back the ban on the sale of petrol and diesel cars from 2030 to 2035.
Former Tory leader Sir Iain Duncan Smith – who was among 43 signatories to a letter urging Mr Sunak to look again at the plan – told Sky News the date was “plucked out of nowhere”, adding: “If you want to get them to clean emissions, you’ve got to do it in a way that still keeps our industry going in the UK.”
The prime minister insisted on Sunday the 2030 deadline would remain, but did announce plans for a review of low traffic neighbourhoods (LTNs), saying he was on the side of drivers.
Downing Street has confirmed ministers are scrutinising existing pledges “in light of some of the cost of living challenges”, as the prime minister promised a “proportionate and pragmatic” approach to net zero.
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The prime minister is also set to meet industry leaders and workers while in Scotland.
The government pledged that, along with energy authorities, it would “go further than before in announcing continued decisive action to boost the capability of the North Sea industry to transition towards net zero, strengthen the foundations of the UK’s future energy mix and create the next generation of highly skilled green jobs”.
Grant Shapps, the energy security secretary, is also expected to meet figures from the oil and gas, renewable and nuclear industries over the coming week as the Conservatives focus their campaign on the topic.
Mr Shapps said: “In the wake of Putin’s barbaric invasion of Ukraine, our energy security is more important than ever.
“The North Sea is at the heart of our plan to power up Britain from Britain so that tyrants like Putin can never again use energy as a weapon to blackmail us.
“Today’s commitment to power ahead with new oil and gas licences will drive forward our energy independence and our economy for generations.”
Henry Birch, the former boss of Rank Group, is among the candidates vying to run Entain, the FTSE-100 owner of Ladbrokes.
Sky News has learnt that Mr Birch is one of a small number of candidates being considered by Entain to replace Jette Nygaard-Andersen as its permanent chief executive.
The recruitment process comes at a challenging time for Entain, which has been beset by boardroom upheaval and regulatory difficulties in various international markets.
Its stock has halved in the last year, leaving it with a market capitalisation of just under £5bn.
This weekend, sources close to the company confirmed that Mr Birch was a serious contender for the post, although they said others were also in contention.
An appointment could still be weeks or even a small number of months away, they added.
Henry Birch, former CEO of Very Group
Mr Birch stepped down as chief executive of Very Group, the online retailer owned by the Barclay family, in 2022.
He is an experienced gambling industry executive, having spent four years as chief executive of William Hill Online prior to joining the London-listed multichannel gaming operator Rank Group.
He has also held roles at Leisure & Gaming plc and BettingCorp.
Under Mr Birch, Very Group broke the £2bn annual sales mark for the first time.
Investors in Entain have been pressing its board to recruit a new chief executive with substantial gambling experience as it grapples with a plunging share price and numerous regulatory and strategic challenges.
Last week, Sky News revealed that former bosses of bookies Coral and Skybet had rejected overtures to become its new boss.
Pic: Reuters
Industry sources said that Dan Taylor, chief executive of Flutter Entertainment’s international operations, had also been approached, although it was unclear whether he was interested.
Entain has been under siege from activist investors for months.
In January, it announced that Ricky Sandler, who runs Entain shareholder Eminence Capital, would join its board as a non-executive director.
Last month, it said that Barry Gibson, its chairman, would retire later this year and be replaced by interim chair, and former acting CEO, Stella David.
Entain has hired bankers to sell PartyPoker and other non-core operations, which the Financial Times reported could include Netherlands-based BetCity, which Entain bought for £398mn last year.
As well as Ladbrokes, Entain owns Coral and a stake in BetMGM, a major US betting player.
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MGM Resorts, the US casino operator behind the Bellagio in Las Vegas, attempted to buy Entain in 2021 but was rebuffed at a much higher valuation than the UK company’s shares trade at now.
MGM has since ruled out a further bid, although analysts expect it to return at some stage.
The company has faced a deluge of regulatory problems, triggering sharp criticism of its governance and business practices.
Last December, it was ordered to pay £615m for failing to prevent bribery at its former Turkish subsidiary under a deferred prosecution agreement.
Shares in Entain closed at 778.8p on Friday, giving the company a market capitalisation of £4.98bn.
Entain declined to comment, while Mr Birch could not be reached for comment.
A privately owned used-car platform is circling Cazoo Group, its stricken US-listed rival which is on the brink of administration.
Sky News has learnt that Motors.co.uk is a leading contender to acquire Cazoo’s marketplace operation, which would include its brand and intellectual property assets.
The process to auction the used-car platform’s constituent parts comes after it spent tens of millions of pounds on sponsorship deals in football, snooker and darts in a rapid attempt to gain market share.
Earlier this week, Cazoo filed a notice of intention to appoint Teneo as administrator, just three years after it floated in New York with a valuation of $8bn.
The filing was intended to provide protection from creditors while Teneo finalises asset sales.
Since an announcement last month about a restructuring of the group, advisers have offloaded a string of assets and unwound Cazoo’s previous operating model to transform it into a marketplace.
Among those have been the disposal of Cazoo’s vehicle fleet, which sources said had been achieved at higher-than-anticipated values, reflecting a current shortage of used cars in the market.
Teneo is also said to have struck a deal with Constellation Automotive, the owner of Cazoo’s rival, Cinch, involving a handful of sites and dozens of jobs.
Meanwhile, several parties are understood to have expressed an interest in Cazoo’s wholesale operation and other vehicle collection sites.
One industry source said the pivot to a platform model had seen its inventory rise to more than 15,000 cars, with Cazoo now the online vehicle marketplace where consumers can buy and sell cars under a single brand.
If, as expected, the group does fall into administration, it would underline the rapid implosion of a company which once ranked among Britain’s hottest technology start-ups.
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Founded by Alex Chesterman, the founder of Zoopla, it raised hundreds of millions of pounds in funding, and rapidly attracted a ‘unicorn’ – or $1bn – valuation.
Mr Chesterman left the business several months ago in the wake of a balance sheet restructuring which saw hundreds of millions of dollars of debt converted to equity.
One insider said the formal triggering of insolvency proceedings was likely to attract wider attention in Cazoo’s assets, including its brand.
It was unclear on Friday how much Motors.co.uk or other suitors for the marketplace were likely to bid for it.
Cazoo founder Alex Chesterman left the business several months ago
A spokesperson for Cazoo said: “Our new marketplace model, where consumers can both buy and sell cars, is revenue generating and performing ahead of expectations with interest from almost 100 car dealers including many household names wishing to trade on the Cazoo platform.
“Cazoo has successfully restructured and significantly reduced the cash burn of the group, resulting in a cash position in excess of £95m at 30th April 2024 compared to £113m at 31st December 2023, and the platform now has approximately 17,000 cars which is more than double the volume we previously supported and demonstrates the scalability of our technology and the strength of the team.
“We are making efforts to secure the next phase of our business and are grateful to our employees for their hard work and commitment.”
Motors.co.uk did not respond to enquiries, while a spokesperson for Cazoo declined to comment on talks about asset sales.
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