Offshore Energies UK (OEUK) said changes to the windfall tax on energy firms and approval of the controversial Rosebank and Jackdaw fields could unlock 111 projects, attracting investment worth £50bn. BBC reported that North Sea output had been falling with projections suggesting that the UK’s domestic supplies will meet only about a third of demand until 2050. However, environmental group, Uplift, branded the report a “fantasy,” urging the Prime Minister not to listen to “self-interested demands” of oil companies.
Per the BBC, the OEUK report sets out the industry’s case for supporting domestic production of oil and gas and displacing imports, which have increased. It calls for the current Energy Profits Levy (EPL), a windfall tax on oil and gas producers which is due to be replaced in 2030, to be scrapped by next January. The replacement Oil and Gas Revenue Levy would be triggered only when prices spike. The sector has long said the EPL has significantly stifled investment because it remains in place even when wholesale oil and gas prices fall.
Last year, for the first time since the North Sea began producing oil and gas, not a single exploration well was drilled. OEUK said the oil and gas industry supported 180,000 jobs in 2024 across the UK. The report said “fiscal reform and a pragmatic approach to licensing could unlock investment and improve longterm energy security.” It said that boosting domestic energy production was vital for “protecting households, businesses and the wider economy from global shocks.” Policy Director, Enrique Cornejo added: “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.”
The second demand from the industry is a signal of long term support for domestic oil and gas production. In essence, that means approving the controversial Rosebank and Jackdaw developments which are currently being considered for permitting by the industry regulator. Both projects had already been given the goahead under the previous Conservative government but were successfully challenged in the Scottish courts on environmental grounds. It has meant all other potential projects have essentially been put on hold until the decisions are taken.
Describing the OEUK’s calls for support as a “fantasy,” Uplift, which is one of the environmental groups that brought the legal challenges, said the North Sea is an “ultramature” basin with very little reserves left. It observed that instead of listening to the “self-interested demands” of the oil companies, Andy Burnham should rather be listening to people whose homes were destroyed in the summer’s wildfires. Director Tessa Khan added: “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. “The science is clear that the world already has far more oil and gas than can ever be safely burned if we are to limit warming.” Among the projects which could be unlocked is a second phase of the Rosebank development, the Cambo field and Clair South – all of which sit west of Shetland. The UK Labour government has banned the issuing of new exploration licences in UK waters.
But OEUK says most of the 111 projects identified are within existing licenced areas. A UK government spokesperson said: “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.”
