It would surely be no skin off the government's chin to talk up the North Sea, writes Business Editor Ian McConnell.

And it would be ridiculous to suggest in any way that the North Sea sector is irrelevant.

There was much fuel for thought in a list of suggested “actions needed to kick-start the UK North Sea” published last Thursday by a major player in the territory.

The intervention was made against the backdrop of elevated crude oil prices arising from the Middle East conflict.

It came from David Latin, chairman of Serica Energy.

Some of his suggestions were, not surprisingly, around the energy profits levy or “windfall tax”, the issue of new field developments and the UK Government’s decision not to award new exploration licences.

Mr Latin made very pertinent points on these hot topics.

What really hit home, however, was his seemingly heartfelt plea on the UK Government’s attitude towards the North Sea.

And he certainly made a most persuasive argument in this regard, in what was the final element of his “four-point plan”.

Highlighting what he would like to see on this front, Mr Latin declared: “Finally, talk about the UK North Sea sector as a national asset; a longstanding source of economic value, world-class skills and immense pride amongst the people and communities involved. Too often in reports and ministerial statements, the sector is referred to in terms which imply irrelevance despite it being the single largest source of energy in the UK, or being less desirable than other sectors even though it supports some 200,000 jobs, many of which are highly skilled.

“The people working in the sector, or dependent on it across the country, deserve better. Moreover, a sector talked up rather than down will deliver more, benefiting the country as a whole.”

His warning against the complete mischaracterisation of the sector should be heeded. It would be ridiculous to suggest in any way that the North Sea sector is irrelevant.

All too often these days, decision-makers look at things in binary fashion: that it is a choice between this or that, that technological change in a sector somehow renders everything that went before less valuable even when it is still absolutely crucial. Such attitudes lead to wrong-headed calls which destroy value.

Politicians making major decisions should reflect on Mr Latin’s point that the North Sea sector is the single largest source of energy in the UK.

Given some of the binary narrative, people could certainly be forgiven for not knowing or even being surprised that this is the case.

In the context of the energy sector, of course it is going through a transition. However, this should be managed sensibly, rather than impulsively opting for some kind of strategy of throwing the baby out with the bathwater.

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The employment and skills in the North Sea sector are crucial. And retention of these skills will play a vital part in the energy transition which is obviously so crucial to tackling climate change.

Mr Latin, while clearly coming from a particular perspective given he chairs a major North Sea player, makes some very good points about the environmental impact of importing oil and gas over long distances, when there is a domestic alternative.

And he was also on the money last Thursday in highlighting the importance of energy security, something which should be obvious in any case all the time and certainly grabs greater attention at times of geopolitical turmoil such as now.

Mr Latin said: “Maximising the benefits available to the UK from domestic oil and gas and achieving net zero by 2050 are not mutually exclusive objectives. Indeed, they complement each other, not least when oil and gas imported over thousands of miles typically comes with significantly higher emissions than the equivalent domestic production.

“These facts are understood and are being acted upon by other oil and gas producing countries in western Europe. Amongst those countries, the UK holds the second-largest resource of oil and gas. For the benefit of ourselves and regional security, we should exploit to the full that position of good fortune and much skill.”

Mr Latin highlighted what he said in his chairman’s statement last year about a need for “common sense UK Government policies” as he offered his latest thoughts last Thursday.

He said: “In my statement last year, I reported that common sense UK Government policies for the North Sea would prioritise domestic production over imports. Regrettably, the merits of such an approach are being reinforced by the interruption to oil and gas supplies from the Middle East. Our thoughts are with all those affected by the situation.

“I also wrote last year that confidence in the UK North Sea sector had been eroded. Since then, the Government has continued to solicit opinions and information through formal consultations and dialogue, which has been welcome, but this has not yet translated into actions which would support a world-class and valuable industry. I take this opportunity, therefore, to repeat our request for a change in approach, to which end I offer a four-point plan.”

His first point was that the UK Government should “demonstrate a willingness to approve the development of new oil and gas fields”.

He declared: “There are project approval decisions which could be made now and others to come over the next several months which would reduce the risks to the UK of future oil and gas crises and could even help with the current crisis if it is prolonged.”

Mr Latin’s second request was that the UK Government “revisit the decision not to award new exploration licences”.

He added: “There is significant untapped oil and gas potential on the UK Continental Shelf and companies like Serica are willing and able to take the financial risks of exploration. We do not ask for subsidies to undertake these activities. We only ask for the ability to do so at our own financial risk.”

The third thing on his wish list was that the Labour Government should “as soon as reasonably possible, replace the energy profits levy with a permanent, properly designed mechanism for raising the level of tax on UK oil and gas production during periods of true 'windfall' prices”.

In this regard, he highlighted “collaborative work by officials and the industry”.

Mr Latin said: “Much collaborative work by officials and the industry has already gone into the design of just such a tax in the form of the oil and gas price mechanism (OGPM) intended to replace the EPL. Implementing this change would still see the Exchequer share fairly in windfalls caused by price shocks but would be a huge step towards rebuilding confidence in the sector.”

There does look to be some meaningful progress along such a route by the North Sea sector and the UK Government.

So this third request looks to be knocking at a door that is at least ajar, albeit the exact timing of the replacement remains to be seen.

The outlook on new field developments and exploration licences looks, for now at least, like a whole other kettle of fish.

Whatever happens on these fronts, it would surely be no skin off the UK Government’s chin in the meantime to talk the North Sea up. And, if it did so, it is difficult to imagine this would not benefit the economy.

© Herald Scotland