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Trump says UK making 'a very big mistake'

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Britain is increasing windfall tax on North Sea energy

producers

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Government aims to quadruple offshore wind capacity by

2030

By Ron Bousso

LONDON, Jan 4 (Reuters) - U.S. President-elect Donald

Trump on Friday criticised the British government's energy

policy with a demand the country "open up" the ageing North Sea

oil and gas basin and get rid of wind farms.

The North Sea is one of the world's oldest offshore oil and

gas basins where production has steadily declined since the

start of the millennium. At the same time, it has become one of

the world's largest offshore wind regions.

"The U.K. is making a very big mistake. Open up the North

Sea. Get rid of Windmills!" Trump said in a post on his social

media platform Truth Social.

Climate-sceptic Trump has long opposed wind farms. In 2015,

he unsuccessfully fought plans to construct one near his luxury

golf course in Scotland.

His post on Friday included a link to a report from last

November about U.S. oil and gas producer APA Corp's ( APA ) unit

Apache's plans to exit the North Sea by year-end 2029. The

company expects North Sea production to fall by 20% year-on-year

in 2025.

Prime Minister Keir Starmer's Labour government won last

year's elections with a pledge to build up Britain's low-carbon

economy. The government aims to quadruple offshore wind

generation capacity by 2030 to 60 gigawatts as part of goals to

lower carbon emissions and improve air quality.

In October, the British government said it would increase a

windfall tax on North Sea oil and gas producers to 38% from 35%

and extend the levy by one year. The government wants to use the

revenue from oil and gas to raise funds for renewable energy

projects.

Oil and gas companies have said the higher tax rate could

lead to a drop in investments. Some companies have sold assets

while others merged operations and sought to diversify to other

regions.

Asked about Trump's remarks, a spokesperson for Britain's

government said it would continue to prioritise a "fair, orderly

and prosperous transition in the North Sea in line with our

climate and legal obligation".

"We need to replace our dependency on unstable fossil

fuel markets with clean, homegrown power controlled in Britain -

which is the best way to protect billpayers and boost our energy

independence," the spokesperson added.

Claire Coutinho, the opposition Conservative party's shadow

energy minister, said in a post on X in response to Trump's

comments that "no other major economy is shutting down its

domestic oil and gas production... It's totally mad".

DECLINING OIL, SLOWING WIND

Oil companies have been exiting the North Sea to focus on

newer basins. Production has declined from a peak of 4.4 million

barrels of oil equivalent per day (boed) at the start of the

millennium to around 1.3 million boed now.

Britain and countries in mainland Europe have overseen major

offshore wind farm development, but the sector's growth has

stalled as costs ballooned due to technical and supply chain

problems as well as higher interest rates.

Some developers been reconsidering their investments in

offshore wind, or have assumed impairments, due to the rising

cost of building wind farms that can be more than 100 km (60

miles) offshore.

Orsted, the world's biggest offshore wind farm

developer, trimmed its investment and capacity targets last

year.

Britain has a target to largely decarbonise its power sector

by 2030, which will mean reducing its reliance on gas-fired

power plants and rapidly increasing its renewable power

capacity.