ABERDEEN, SCOTLAND – July 22, 2025 – The UK North Sea oil and gas sector stands at a critical juncture, wrestling with the ambitious pursuit of net-zero emissions while confronting the undeniable reality of immediate energy demands. As the transition to cleaner energy proves more protracted than initially hoped, the continued vitality of domestic oil and gas production, including the judicious issuance of new licenses, emerges as paramount for national energy security and economic stability.
Despite recent government pronouncements against new exploration licenses, focusing instead on managing existing fields, this approach risks overlooking the significant untapped potential within the North Sea. A recent OEUK report paints a compelling picture, indicating that the UK could potentially double its domestic oil and gas production, with an estimated 7.5 billion barrels of reserves still available. Tapping into these resources wouldn’t just bolster our energy independence, reducing a dangerous reliance on volatile international markets, but also generate substantial economic value and secure vital jobs for highly skilled workers across the region. The current policy, however well-intentioned, fails to fully acknowledge that the transition to truly scalable clean energy is a marathon, not a sprint, and our energy needs today are immediate and substantial.
The industry continues to voice concerns over the prevailing windfall tax, arguing persuasively that without a more supportive fiscal environment, investment in this critical sector will inevitably dwindle, accelerating decline and forcing greater reliance on imports. This premature disinvestment would be a strategic misstep, compromising our ability to meet energy demands and sustain the very infrastructure needed for a future energy mix.
Operational activity, while robust, faces a challenging environment. EnerMech continues to secure vital contracts for crane operations and maintenance, and shutdown support for the Triton FPSO, underscoring the ongoing operational needs of existing infrastructure. Corporate movements like EnQuest’s acquisition of Harbour Energy’s Vietnam assets and Viaro Energy’s impending acquisition of Deltic Energy highlight a resilient, albeit constrained, market. Yet, concerns about job security and the future of our highly skilled workforce persist, exacerbated by policies that appear to accelerate the decline of a sector still very much in demand. We must ensure a “just transition” isn’t just a slogan, but a reality that supports these essential workers.
While the expansion of renewable energy, particularly offshore wind, is commendable with projects like the Mona offshore wind farm and the continued development of Dogger Bank D demonstrating significant progress it’s crucial to acknowledge the timelines and scalability challenges involved. The UK’s ambitious targets for offshore wind, alongside renewed focus on onshore wind, hydrogen, and CCUS, are vital long-term goals. However, these burgeoning sectors cannot, in the immediate to medium term, fully replace the reliable and dispatchable energy provided by domestic oil and gas.
In essence, a pragmatic approach dictates that the North Sea remains a cornerstone of the UK’s energy strategy. While embracing the future of clean energy, it is imperative that we recognise the enduring, vital role of our domestic oil and gas production. This includes a robust re-evaluation of new licensing to ensure energy security, sustain critical jobs, and manage a truly stable and secure energy transition, rather than prematurely abandoning a vital national asset.
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