BP signs Venezuela gas deal after quitting North Sea

BP has secured a drilling licence off the coast of Venezuela, just two weeks after abandoning the North Sea. The oil giant signed a deal with the Latin American country to allow it to explore and develop the Loran gas field in the Atlantic. The deal gives BP access to some four trillion cubic feet of gas and comes a fortnight after it put its North Sea business up for sale. The decision to abandon UK waters after 60 years – and focus instead on areas such as Venezuela – fuelled fears that the crippling windfall tax on oil and gas producers is crushing the industry. BP chief executive Meg O’Neill has warned that the North Sea is no longer ‘competitive’ and urged Andy Burnham to scrap the windfall tax. Conservative shadow energy minister Andrew Bowie said it was ‘not surprising’ that BP was looking elsewhere ‘because you’ve got a government that is completely anti their core business’. ‘The North Sea basin is now one of the most fiscally insecure basins in the world,’ he said. ‘It’s incredibly disadvantageous and puts off investors. ‘They have no idea what’s coming down the tracks when it comes to taxation policy, and there is not a feeling of being welcomed here in the United Kingdom. ‘It’s not surprising that BP are looking around the world at places to expand their business when they have got no hope of doing so in the UK because you’ve got a Government that is completely anti their core business.’ The BP deal, signed in Caracas and broadcast on state TV, comes as international oil giants expand into Venezuela following the arrest of former president Nicolas Maduro by US forces in January. BP will drill the second phase of the Loran gas field with United Arab Emirates firm XRG and Qatari conglomerate UCC Holding. O’Neill, who signed the deal, said: ‘The award of the Loran Phase 2 licence is an important step forward. It builds on the strong collaboration we have established with the government of Venezuela and our partners and reflects the progress we have made together. BP has a long-standing presence in the region and deep experience in developing major gas resources. ‘Together, these agreements provide a strong foundation to progress Venezuela’s offshore gas potential and unlock the next phase of development.’ Richard Tice, Reform UK’s energy spokesman, said: ‘What a tragedy that BP is having to do drilling deals with authoritarian dictatorships instead of in the North Sea. ‘This highlights the absolute absurdity of Labour’s refusal to open up the North Sea.’