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A recent industry report suggests that the UK has the potential to meet half of its oil and gas requirements domestically, reducing reliance on imports, provided the government offers stronger support to the sector. Produced by Offshore Energies UK (OEUK), the report highlights that modifying the windfall tax imposed on energy companies and approving contentious projects such as the Rosebank and Jackdaw fields could unlock up to 111 new developments. These projects might attract an estimated £50 billion in investment, potentially reversing the downward trend in North Sea oil production. Currently, forecasts predict that UK domestic supplies will only cover around a third of demand until 2050, prompting concerns about energy security.
The report outlines the industry’s position advocating for enhanced domestic production and reducing dependence on imported energy. A central recommendation is to abolish the Energy Profits Levy (EPL), a windfall tax on oil and gas producers, by January next year. The EPL, which is set to be replaced in 2030, would be substituted by the Oil and Gas Revenue Levy, designed to activate only during periods of price spikes. Industry representatives argue that the EPL has dampened investment for years, as it remains in effect regardless of fluctuations in wholesale prices. The impact of this has been stark; in the previous year, no exploration wells were drilled in the North Sea for the first time since production began.
Employment figures shared by OEUK indicate that the oil and gas sector supported around 180,000 jobs across the UK in 2024. The report emphasizes that fiscal reforms paired with a more flexible approach to licensing could stimulate much-needed investment and reinforce the country’s energy resilience. Enrique Cornejo, Policy Director at OEUK, stated, “Britain is at a critical juncture. Our industry is ready to invest and deliver more homegrown oil and gas, but the window for action is narrowing. Without urgent policy decisions, the UK risks increasing its dependence on imports, losing high-value jobs.” Alongside tax reforms, the industry is seeking long-term governmental backing for domestic projects, particularly stressing the importance of moving forward with the Rosebank and Jackdaw developments, which are currently stalled.
These two projects had received approval from the previous Conservative government but were halted following successful environmental legal challenges in Scottish courts. This pause has delayed other potential ventures, effectively putting numerous projects on hold pending future decisions. Environmental groups such as Uplift, one of the parties involved in the legal challenges, have dismissed OEUK’s proposals as unrealistic. Labeling the North Sea an “ultra-mature” basin with limited remaining reserves, Uplift argues that prioritizing new oil drilling ignores the climate crisis, stating: “The UK has burned most of its gas and what’s left is mostly oil, the vast majority of which is exported and sold on international markets. New drilling will do nothing to bring down bills and little for energy security.” Their director, Tessa Khan, emphasized the scientific consensus that current oil and gas reserves exceed what can safely be burned to meet climate goals.
Projects highlighted by OEUK as potential candidates for development include a second phase of the Rosebank field, the Cambo field, and Clair South—all located west of Shetland. However, the current UK Labour government has placed a moratorium on new exploration licenses in UK waters. Nonetheless, OEUK claims that most of the 111 projects they identified fall within already licensed areas. Responding to the report, a UK government spokesperson emphasized ongoing support for the energy sector, stating: “We’re giving the sector and its investors the long-term certainty to plan, invest and support jobs with plans to replace the EPL when it ends by 2030, or earlier if its price floor is triggered. We are also making sure the North Sea has a prosperous and sustainable future through record investment that helps deliver the next generation of skilled jobs while growing the clean energy industries of the future.
Read the full article from The BBC here: Read More
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