The British government plans to legislate to mandate annual North Sea oil and gas licensing rounds, in a move Prime Minister Rishi Sunak says would create certainty for the industry during a transition to greener energy.
In July the government said more than 100 new oil and gas licenses in the North Sea would be granted, and the new legislation on future rounds will be set out on Tuesday when King Charles outlines the government's legislative agenda at the start of a new parliamentary session.
Sunak has said the new licenses are compliant with the government's environmental targets, and the requirement for new rounds each year will be conditional on domestic production being greener than imported alternatives.
"Domestic energy will play a crucial role in the transition to net zero," Sunak said, adding the legislation would provide "clarity and certainty".
Sunak is hoping to use the King's Speech on Tuesday to gain positive momentum ahead of a national election expected next year, with the opposition Labour party currently enjoying a double-digit lead in opinion polls.
He has sought to differentiate the government from Labour on green issues, delaying a ban on petrol cars and easing a transition away from gas boilers, while sticking with a legally binding target of hitting net zero by 2050.
Labour has said it will stop issuing new oil and gas licenses in the North Sea, though it will respect any that are granted before any election.
Under the government's proposals, the North Sea Transition Authority (NSTA) will be required to invite applications for new production licenses on an annual basis.
The licensing rounds would only go ahead if Britain is projected to import more oil and gas from other countries than it produces at home and if the production of UK gas is associated with lower emissions than importing liquefied natural gas (LNG), the government said.
(Reuters - Reporting by Alistair Smout; editing by David Evans)