OPINION: Few can argue against the destination the long-awaited North Sea Transition Deal is proposing.

However, the landmark agreement, announced last week, appears short on detail on how to get there.

Industry and government, including Business & Energy Secretary Kwasi Kwarteng, hailed the deal as a “transformative” package that sets the stage for new investment to help operators cut operational carbon emissions and kick-start hydrogen and carbon capture projects, while also safeguarding 40,000 jobs across the supply chain.

It is intended to cut greenhouse gas emissions by up to 60 million tonnes in total by 2030, including 15 million tonnes from the production of oil and gas on the UK continental shelf.

Catching many of the headlines was the deal’s main pledge that it would lead to £16 billion ($22 billion) of joint private and public investment.

This includes up to £3 billion to kick-start the electrification of oil and gas platforms with greener power, up to £3 billion for carbon capture and storage and up to £10 billion for hydrogen production.

Delve a little deeper into the deal document, however, and it is unclear exactly how much — if any — of this is new money from the Treasury.

Much of the £16 billion seems to be an aspirational figure, apparently a total for projects in planning or execution but not necessarily committed to.

For the government’s part, its side of the bargain appears to be promises to build the commercial and regulatory frameworks that will allow these investments to take place.

Take the specific pledges on replacing fossil fuel-based power supplies on oil and gas platforms with lower-carbon alternatives, for example.

The document states that initially this will require “collaborative investment” only for it later to state that “the sector will invest” between £2 billion and £3 billion.

It then adds that the government “will work with the sector to identify potential funding sources and opportunities for early-stage offshore electrification studies... that businesses could bid into, on a match-funded basis”.

That does not read like the sort of certainty industry often says it needs when considering long-term investments.

One senior North Sea business leader called it the “deal that forgot the pandemic”.

“It would have worked better a couple of years ago but the North Sea is in a more fragile state now compared to then,” the executive said.

“Despite the fanfare, in reality it doesn’t seem as though there is much support for the industry in the near-term, which in turn would help incentivise investment in the longer-term.”

Some fear that, without real financial incentives from government — similar to those seen in Norway — there is a risk capital will relocate away from the UK North Sea.

That could hamper the prospects for the sort of energy transition the government wants.

It could also mean the UK has to import more gas, with little control over where supplies come from or the emissions associated with its production, ironically something the deal aims to prevent.

For the all the effort we are told went into negotiations, much work lies ahead for both government and industry to turn the deal’s grand ambitions into a reality.

A step in the right direction, yes. But a big leap forward? The jury is still out.

(This is an Upstream opinion article.)