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As Andy Burnham prepares to take office as prime minister, speculation is mounting about his intentions regarding North Sea oil drilling. While there is talk of new plans being announced, it is unlikely that Burnham will immediately grant approval for the contentious Rosebank and Jackdaw oil fields. These projects, initially approved under the previous Conservative government, are currently under review following a legal challenge that highlighted insufficient consideration of their full climate impact. Environmental groups, including Greenpeace and Uplift, successfully argued that the government overlooked the emissions consequences tied to these fossil fuel developments.
Although infrastructure for both Rosebank and Jackdaw is already largely in place, the approvals process remains incomplete, with the Offshore Petroleum Regulator for Environment and Decommissioning (Opred) still concluding its final evaluations. Consultations related to these applications are ongoing and scheduled to close in August, meaning any hasty decisions could result in further legal challenges. Consequently, Burnham’s administration faces a delicate balancing act as it navigates these unresolved but urgent matters at the start of its tenure.
Beyond the scrutiny around specific oil fields, another significant issue facing the new prime minister revolves around oil and gas exploration licences, which grant companies exclusive rights to investigate hydrocarbon deposits within designated sea areas known as “blocks.” The Labour Party’s 2024 election manifesto committed to banning new licences, a pledge rapidly implemented by Energy Secretary Ed Miliband after Labour took power. However, a concession has already been made allowing “tie-backs,” or production from unlicensed nearby areas connected to existing licensed infrastructure. This approach skirts the manifesto promise without breaking it outright. Meanwhile, major oil companies like BP, Shell, and TotalEnergies have been divesting their North Sea assets to smaller operators, who focus primarily on extracting remaining reserves rather than seeking new fields, partly due to the high risks and costs of exploration.
Another policy area Burnham could address is the future of the Energy Profits Levy (EPL), commonly known as the windfall tax, introduced after the surge in prices following Russia’s invasion of Ukraine. The levy currently demands 78% of profits regardless of market conditions, a measure that the industry claims deters investment and has contributed to declining capital flows in the North Sea sector. Set to be replaced by a more flexible windfall tax in 2030, which activates only when prices are high, the EPL is favored for reform by many industry stakeholders. Unlike the controversies surrounding licences and field approvals, revising the EPL might attract less opposition from environmental advocates and align with Burnham’s broader goal of reindustrialization through fostering jobs and investment—though it is not the most dramatic policy move politically. Ultimately, how Burnham handles this issue may signal whether his leadership seeks substantive economic stimulus or simply headline-grabbing announcements
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