Statoil wants UK government signal on gas future

LONDON (Reuters) - Norwegian oil and gas giant Statoil has called on the British government to publicly support the future use of gas in the UK energy mix to soothe investor concerns, a senior executive told Reuters.

"We think there's lot of uncertainty in the UK market these days when it comes to oil and gas," Rune Bjoernson, senior vice president for natural gas, said in an interview on Tuesday.

"We would like a clear statement from (the government) where they actually say that gas is to play a prominent role in the energy mix, something along the lines of what Chancellor (Angela) Merkel in Germany provided us with."

In March, the UK government unexpectedly raised the tax rate for offshore oil and gas exploration to 32 percent from 20 percent, fuelling concerns among producers that a number of marginal fields may become unprofitable.

Statoil put on hold development of two oil and gas fields off the British coast following the tax rise.

Germany's Merkel, on the other hand, says her country's exit from nuclear power will require heavier investment in gas and coal power plants.

Bjoernson said the UK's Electricity Market Reform (EMR) proposals clearly support nuclear and renewable energy, but fail to give incentives to investors involved in the gas industry.

"That is a bit strange in times of financial austerity because that's where the British consumer and British industry will be presented with a higher energy bill," he said.

Statoil's investor partners had grown reluctant to make investment decisions in the UK due to regulatory uncertainty, he added. "We are an industry with very long lead time. We need a predictable regulatory framework."

The EMR White Paper is expected to be presented to parliament before the summer recess, which starts in July.

Statoil is the largest supplier of gas from the Norwegian Continental Shelf to the UK, with a market share of around 16-18 percent, according to company figures.

UK imports of Norwegian gas have dropped in recent months as Britain has sourced additional supply from liquefied natural gas (LNG) tankers.

Despite the decline, Bjoernson said he was confident Norwegian gas and LNG could supply Britain alongside each other.

"I think that as UK production falls there's room for Norwegian gas and additional LNG," Bjoernson said.

(Editing by James Jukwey)