As the passing decades allowed the oil crises of the 1970s to fade into distant memory, people developed a collective amnesia about risks to energy security. Thus Europe looked past the dangers of becoming overly-reliant on gas from Russia, and the UK failed to invest in large-scale gas storage, to name but two examples.

All of that changed last year as Russia’s invasion of Ukraine quickly felled the long-running era of cheap and abundant energy. Despite noble pledges in 2021 at the COP26 summit in Glasgow, the UK Government announced last year that it will award up to 130 new licences for oil and gas exploration in the North Sea. Necessity trumped the ideal of a zero-carbon future.

Those exploration licences are facing legal challenges in court, but financial markets are clearly sold on the notion of a reinvigorated future for fossil fuels – at least in the medium-term.

READ MORE: Pioneers show lots to go for in North Sea amid energy strategy row

There were further reminders of this during the past week as North Sea minnow IOG secured backing from a big fish despite its significant troubles of late. 

IOG saw its shares plunge earlier this month after it revealed it had hit fresh complications in efforts to develop the vintage Southwark gas find with the CalEnergy Resources business owned by US billionaire Warren Buffet. CalEnergy bought into the project in 2019, with the two companies aiming to develop a range of North Sea gas finds that other firms had decided were not worth the effort.

After problems with the first fields brought into production in the Saturn Banks area, the setbacks at Southwark raised questions about this plan. However, IOG revealed on Wednesday that it had teamed up with CalEnergy to bid for more exploration territory in the latest contentious licensing round which closed earlier this month.

The Herald: Warren BuffetWarren Buffet (Image: Johannes Eisele/ Getty Images)

One of the axioms of investment is that not every venture will pay off, even if you are Warren Buffet. Even so, the Sage of Omaha gets it right more often than not.

Staying on the theme of offshore production, the battle over the future of Edinburgh’s Capricorn Energy took a significant turn on Tuesday when the Scottish company caved in to shareholder pressure with the departure of the majority of its board of directors.

Israel’s NewMed Energy said its proposed merger with Capricorn is now “significantly” less likely to go ahead following the immediate resignation of five board members at Capricorn, including chief executive Simon Thomson. Two more board members will leave in the coming days, while Capricorn has also postponed the vote on the NewMed merger.

The sustained revolt was led by activist hedge fund Palliser Capital, one of Capricorn’s largest shareholders, who argued among other things that the deal undervalued the Scottish company. The departing directors are due to be replaced by Palliser nominees, with a vote to take place on Wednesday.

 

One of the biggest barriers in the transition to renewable energy sources is how to store the output from wind and solar farms until it is required at times of high demand. Edinburgh-based Gravitricity, which claims to have a solution, announced earlier this week that it is launching a £40 million fundraising campaign to build three demonstrator projects.

Analysts have predicted that global investment in green energy storage technologies will reach £662 billion by 2040. It is an area of growing interest, but for the time being, so too is oil and gas production.