Illustration; Source: Eni

Eni’s CEO portrays UK as ‘primary’ investment playground for gas, renewables, and CCS pursuits

With the energy transition momentum picking up the pace across the United Kingdom (UK), many see Britain and the UK Continental Shelf (UKCS) as a fertile landscape for investment in oil and gas and emerging energy sectors. This is hammered home by the Chief Executive Officer (CEO) of Italy’s oil and gas giant Eni, who recently confirmed that the UK was still on its list of top investment destinations not just for natural gas but also for renewable energy, and carbon capture and storage (CCS).

Illustration; Source: Eni

Britain is determined to come to grips with the double whammy of energy security and sustainability by slashing its emissions footprint and enabling investments in a new wave of projects to ensure the security of supply. During this quest, the North Sea basin is expected to play a key role in helping the country to reach its net zero goals.

Many have pointed out the knock-on damaging impact of the Energy Profits Levy (EPL), including Offshore Energies UK (OEUK), which recently underlined that the windfall tax hike, resulting in the North Sea oil and gas operators paying a 75% headline tax rate, affected decommissioning progress due to the cost of shutting down old installations not being treated as an allowable expense.

However, the UK is also actively taking steps to ramp up its hydrocarbon potential, as confirmed by 27 new licenses that were awarded as part of the 33rd licensing round, with more to follow in the coming months. For the North Sea Transition Authority (NSTA), this is “a clear sign” of the North Sea’s enduring appeal. In addition, 21 licenses were awarded in Britain’s first-ever carbon storage licensing round, adding to the six already in existence.

Based on the UK regulator’s data, the North Sea’s investment case has been further buoyed by measures in the government’s Autumn Statement, which is expected to bring long-term stability and predictability to oil and gas taxation. Eni seems to have a good grasp on the opportunities in Britain’s energy landscape.

During a meeting in London with the UK’s Secretary of State for Energy Security and Net Zero and Eni’s CEO, the company’s activities and plans in the country, which span across the entire energy value chain were discussed. The Italian giant used this chance to reiterate its intention to continue contributing to the UK’s energy security, which was reinforced with the 2023 Neptune acquisition. In addition, the oil major confirmed its role as “a key partner” in the country’s net zero transition.

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Claire Coutinho, UK Secretary of State for Energy Security and Net Zero, commented: “The UK has the right geology, the right infrastructure, and the right skills to be at the forefront of carbon capture technologies. From oil and gas and offshore wind in the North Sea, to CCUS and hydrogen in Norfolk and Liverpool Bay, Eni are backing the UK, investing in jobs and helping us develop the innovative technology that will reduce carbon emissions around the world.”

This meeting offered an opportunity to discuss the ongoing investments Eni is mobilizing in the CCS sector, with its two projects: HyNet North West and Bacton Net Zero. These projects are expected to assist in decarbonizing Britain’s hard-to-abate sectors, contributing to reaching the country’s 2030 targets while creating new job opportunities and ensuring the long-term competitiveness of UK industries.

Claudio Descalzi, Eni’s CEO, remarked: “Eni sees the UK as a primary destination for its investments. We recognize the government’s leadership in promoting a favorable regulatory environment and clear strategy toward an orderly and fast energy transition, especially in the UK’s CCUS sector. Eni has the right skills and experience in gas injection to be the number one CCUS player, leveraging its depleted assets in the country.”

Furthermore, Eni’s activities in the offshore wind sector via Plenitude’s participation in Vårgrønn were also discussed, with Dogger Bank, Cenos, and Green Volt projects capable of generating clean electricity over 5 GW and also bolstering the decarbonization of North Sea oil and gas platforms. The Italian firm’s plans to expand its magnetic fusion initiatives in the UK were also discussed.

Boosting energy arsenal while curbing emissions

Descalzi noted that the meeting presented “a great opportunity” to align views with the government on a mutual willingness to advance different areas in which Eni was investing, and the conditions that could help further propel the implementation of projects forward while attracting more investments into the country.

“All of this can be built on key pillars that Eni and the UK government share: natural gas to ensure energy security; renewables and offshore wind to decarbonize the power sector; CCS to help hard-to-abate industries transition to net zero; fusion energy to shape the energy sector of tomorrow,” added the Italian giant’s CEO.

Climate and environmental activists claim that new oil and gas production in UK waters will prevent Britain from reaching net zero by 2050, however, an analysis from the NSTA in July 2023 showed that the carbon footprint of domestic gas production was around one-quarter of the carbon footprint of imported liquified natural gas (LNG).

Eni has invested in multiple energy projects around the world, including the Congo LNG project, where the firm reached a new milestone in December 2023 by introducing the first gas into the Tango FLNG facility moored in Congolese waters.