Sir Ian Wood has urged the UK Government to confirm that part of its £20billion carbon capture utilisation and storage (CCUS) pot will go to the Acorn project in Aberdeenshire.

He said the announcement of the CCUS funding in the Budget was welcome - even though there was no specific mention of the St Fergus scheme from the chancellor last Wednesday.

Acorn – the backbone of a wider Scottish “cluster” of carbon-capture initiatives – is currently only a reserve project after it missed out on track-one status.

Details for track two are expected imminently, and the north-east development is expected to make the cut this time.

Jeremy Hunt said the £20billion would pave the way for CCUS schemes “everywhere across the country”, as Britain pursues its goal of net-zero by 2050.

Commitment welcomed

Sir Ian welcomed the commitment to support carbon capture, but he urged the UK Government to confirm, as a priority, that the Acorn project will benefit from this funding.

The leading enterpreneur told the Press & Journal: “Removing its reserve status and allowing it to move forward will unlock billions of pounds of private-sector investment, support significant new job creation across the north-east of Scotland and help ensure the UK accelerates toward meeting net-zero targets.”

Meanwhile, Sir Ian said the chancellor’s failure to apply a price floor for the windfall tax on North Sea oil and gas producers was “disappointing”.

He added: “This policy is creating an adverse environment for investment and jobs precisely at the time we need to be maximising domestic energy security. We must have a more-stable fiscal regime to incentivise this which will, in turn, allow us to accelerate our energy-transition ambition.”

There was dismay in the north-east last week when there was no news in the Budget about any rethink on the terms of the controversial windfall tax.

Detrimental impact

Evidence of the levy’s detrimental impact on the sector has been emerging on an almost-daily basis, but warnings to Mr Hunt on the long-term effect have been falling on deaf ears.

Meanwhile, the government’s initial expectations that the windfall tax would raise £40billion by 2028 looks ever-more remote.

The Brent crude futures price, which was hovering at just under $100 a barrel in November, is now less than $71, while the UK natural gas futures price has plunged to less than 100p a therm – around a third of what it was in November.

Oil prices on both sides of the Atlantic settled lower on Friday due to banking-sector fears. Reuters reports that Brent fell nearly by 12% last week - its biggest weekly fall since December.

"The underlying fundamentals aren't as terrible as what is being priced in here, but there is concern oil is not as safe a place as cash or gold," said John Kilduff, a partner at Again Capital in New York.

Support for oil prices

Analysts still expect constrained global supply to support oil prices in the foreseeable future. OPEC+ members attributed last week's price weakness to financial drivers rather than any supply and demand imbalance, adding that they expected the market to stabilise.

The fall in the oil price in America could spur the US Government to start refilling thes Strategic Petroleum Reserve - boosting demand. And analysts expect China's demand recovery to add price support, with US crude exports to China in March heading towards their highest in nearly two and a half years.

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