Hartshead Resources NL (ASX:HHR) has welcomed the UK Government’s Department for Business, Energy & Industry Strategy publication of the new British Energy Security Strategy (BEIS).
The strategy has significant implications for the UK North Sea Oil & Gas sector, with a renewed focus on making the most of the United Kingdom’s domestic oil and gas resources during the energy transition.
This works in Hartshead’s favour as its Phase I Gas Development Project is one of the near-term projects that should benefit from the government’s focus to bring new oil and gas developments on stream faster and more efficiently.
“We are delighted to see the UK Government and Prime Minister reaffirm their commitment to the rapid and responsible development of the UK’s oil and gas resources. All of us at Hartshead look forward to playing our part in providing much-needed energy to UK consumers,” Hartshead CEO Chris Lewis said.
Greater energy independence
The BEIS sets out how Great Britain will accelerate homegrown power for greater energy independence.
It comes in light of the transition to renewables and the highlighted need for independent energy supply amid crumbling relations with Russa due to the Ukraine war.
The government writes: “So as the global economy reopened in the aftermath of the pandemic, the sudden surge in demand for everything from new cars to foreign holidays drove a massive spike in demand for oil and gas, dramatically increasing the price of these essential fuels.
“This has been compounded by Russia’s abhorrent and illegal invasion of Ukraine. As we are part of a global market, the price we pay for gas is set internationally. And President Putin has used this against us by restricting the supply of Russian gas to the European market, further pushing up prices. The vital sanctions imposed by the UK and its allies to support the Ukrainian people will also inevitably have an adverse effect on all economies.
“As a result of all these factors, European gas prices soared by more than 200% last year and coal prices increased by more than 100%. This record rise in global energy prices has led to an unavoidable increase in the cost of living in the UK, as we use gas both to generate electricity and to heat the majority of our 28 million homes.
"The government’s immediate priority has been to provide financial assistance to families and businesses struggling with higher energy bills. But when the UK is spending the equivalent of over £1,200 per person this year, just to service the national debt, we cannot afford merely to rely on taxpayer funding to assist with paying ever higher bills; we need to bring down the bills themselves.
“Even as we reduce imports, we will continue to need gas to heat our homes and oil to fill up our tanks for many years to come – so the cleanest and most secure way to do this is to source more of it domestically with a second lease of life for our North Sea. Net-zero is a smooth transition, not an immediate extinction, for oil and gas.
“Accelerating the transition away from oil and gas then depends critically on how quickly we can roll out new renewables. The government’s ‘Ten point plan for a green industrial revolution’, together with the ‘Net-zero strategy’ and this Energy Strategy, is driving an unprecedented £100 billion of private sector investment by 2030 into new British industries including offshore wind and supporting around 480,000 clean jobs by the end of the decade.”
About Hartshead
Hartshead is 100% owner and operator of Licence P2607 which is comprised of five blocks in Quads 48 and 49 on the United Kingdom Continental Shelf, in the Southern Gas Basin.
The Licence contains multiple gas fields, some of which have been only partially developed. There are also several exploration prospects.
The Phase 1 program comprises the Somerville and Anning Gas Fields. Both fields have historic production, multiple well penetrations, 3D seismic coverage and combined remaining resources of 324 Bcf of gas (2C contingent resources).
Hartshead has commenced field development planning work on these two fields and intends to define the development concept and gas export route by 2022, Take Final Investment Decision (FID) on the development in 2023 and achieve first gas in 2024.