The chairman of North Sea gas explorer Cluff Natural Resources has insisted there is still a future for gas despite the drive towards net-zero carbon emissions.
Mark Lappin said his company is in a strong position to ride out the energy industry downturn caused by coronavirus because it is not exposed to volatile oil prices.
He said last year’s farm-outs of the Southern North Sea Pensacola and Selene prospects to Shell was a vote of confidence in natural gas. But the company admitted a farm-out of the Dewar prospect, off Aberdeen, would be delayed by uncertainty caused by coronavirus.
In its final results for the year to 31 December 2019, Cluff reported a loss of £2.3 million, up from a loss of £1.6 million the previous year. It had £13.8 million in cash and no debt.
Lapping said: “There needs to be more honesty in the debate, as ‘net zero 2050’ for a society that contributes less than 2% of global carbon dioxide cannot come at any cost.
“Any decisions made need to preserve employment and generate prosperity in the UK. It must be recognised that these natural resources, in particular gas, are highly beneficial to society and can play a key role in facilitating and funding the transition to a lower carbon future.
“Whether this involves using natural gas to generate hydrogen for heating, transport and petrochemical feedstocks or a requirement to develop carbon capture, storage and utilisation solutions for natural gas fired electricity generation, these are all superior to the narrative of just keeping hydrocarbons ‘in the ground’ and wishing for the emergence of a new technology to replace the fundamental role that hydrocarbons play in supporting our lifestyles.”