Cabinet ministers are in talks with North Sea operators about selling gas at reduced prices for UK use.

It is understood that new Business & Energy Secretary Jacob Rees-Mogg is exploring buying gas on a long-term fixed contract to help ease the energy crisis facing businesses and consumers.

Mike Tholen, the acting chief executive of OEUK, confirmed in a media briefing that talks with its members were ongoing, as the group published a new report calling for acceleration of investment in the UKCS.

The report said urgent action was needed to reduce the UK's reliance on exports and vulnerability to global price shocks.

It urged ministers to announce the next round of oil and gas exploration licences as soon as possible.

Reliance on imports

OEUK also called for production approvals to be speeded up, as well as a rapid expansion of offshore wind.

In an economic report focusing on UK energy security, the organisation said there were energy reserves equivalent to 15billion barrels of oil - enough to fuel the UK for 30 years.

But it warned that without "rapid new investment", the UK would have to import about 80% of its gas and 70% of its oil by 2030.

Speaking outside Downing Street on Tuesday, new Prime Minister Liz Truss promised to "deal hands on with the energy crisis caused by Putin's war".

She said she would "take action this week to deal with energy bills and to secure our future energy supply".

OEUK's economic report estimates that the annual industry and consumer spend on energy will triple if the current planned October price cap increase goes ahead.

It also called for the Scottish and UK administrations to align regulation, responding to concerns that carbon capture and storage projects in the North Sea may be hampered by conflicting marine planning issues for offshore wind farms.

Red alert

Responding to the report, Mr Tholen said: “Our report is a red alert for UK energy security. Today 24 million UK homes are heated by gas boilers; 30-plus gas-fired power stations produce about 40% of our electricity, and we have 32 million vehicles running on diesel and petrol.

“The UK’s homes and businesses cannot yet do without these fuels, but Putin’s war in Ukraine shows the risks of relying on other countries for energy. Our North Sea reserves mean the UK can protect itself – provided we invest – as well as building the low-carbon systems for the future.”

“It means we must expand the supply of low carbon energy including wind and hydrogen but the scale-up will take time. UK gas will give us a bedrock of reliable energy through the transition and minimise reliance on imports.

“In practical terms we need the new government to rapidly announce the next round of oil and gas exploration licenses and speed up production approvals.

“We are also encouraging the UK government’s focus on tariff reform. Right now, our energy markets are being controlled by President Putin who is driving up the price of gas to break ours and Europe’s resolve over Ukraine. We cannot let that continue.

"We need to move away from a system that allows the price of gas to control the cost of electricity. This is also important for our ambition of moving towards low-carbon energy where our power comes increasingly from renewables and nuclear."

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