North Sea oil fields could produce an extra 2bn to 3bn barrels and boost growth if licences are approved, oil groups claim
Britain could produce enough oil and gas to meet half its projected needs in next quarter of a century if North Sea companies were offered the “right business conditions”, an industry body argues.
North Sea production has fallen to the lowest level on record, leaving the UK importing about half the oil and gas that it needs.
Oil industry body, Offshore Energies UK (OEUK), said that under current plans, Britain looks set to produce the equivalent of just four billion barrels of oil from the North Sea in future as supplies dwindle.
Britain’s official climate advisers forecast the UK will still need the equivalent of 13 to 15 billion barrels of oil between now and 2050 even if net zero targets are reached by then, meaning much of the required oil and gas will be imported from overseas suppliers.
North Sea oil self-sufficiency?
The industry argues there is “a significant opportunity still left in the North Sea” to deliver a further two to three billion barrels a year from domestic production, enabling Britain to “meet about half its needs”.
It claims that clarity on licensing, regulation and “globally competitive tax policies” are necessary for the industry to attract private investment to maximise production.
Developing and fostering homegrown energy production over imports will better support jobs, protect consumers, and grow the economy, the OEUK claims.
The industry body warned that “decisions in the coming weeks and months will help shape the future of the sector”.
Speaking as it published its 2025 Business Outlook report, David Whitehouse, OEUK chief executive, insisted new oil and gas field consents will be necessary to meet almost half the UK’s needs.
As the UK strives towards net zero, he said oil and gas would continue to “play a significant part” in meeting UK energy needs
“By 2050 a fifth of the energy we consume will still be oil and gas, even under a net zero scenario,” he stated. “If we make the right choices we can produce half of that domestically ourselves.”
The OEUK chief executive stated: “Today, we’re on track to produce only four billion of those barrels in the UK, but with the right polices to encourage firms to invest we could unlock another three billion barrels and meet half our entire needs.”
Such a move would add £150bn of value to the UK economy, he stated. “Energy security is national security. In an increasingly volatile world the widening gap between the energy we produce and what we import matters.”
Whitehouse added: “People all recognise that on the journey to net zero we will need oil and gas for decades to come. It makes sense for the UK to produce as much as it can itself.”
New oil fields?
Whitehouse insists“the bulk of the oil and gas we need can be produced from existing fields and licensed areas”. To extract the extra two to three billion barrels in full “will require access to previous oil and gas discoveries and areas around existing infrastructure that are currently not licensed”.
Ministers opened a consultation this month on “the clean energy future of the North Sea”. They are also preparing fresh guidance on the environmental hurdles that companies must clear to develop new fields.
Since coming to power Labour, via the Department for Energy Security and Net Zero, has maintained it will not issue licences to explore new fields. It says, as it seeks to reduce emissions towards the target of the UK achieving net zero, new oil and gas fields are “not compatible” with the drive to limit global warming to below 1.5°C, and they are trying to develop cleaner energy industries instead.
However, the consultation may also leave room for the Government to take a flexible approach to a drilling process that could permit new fields to be drilled via existing adjacent fields. Such a move might enable newly discovered oil fields such as the Bressay field, which is expected to produce 200–300 million barrels of crude oil over its lifetime, and the Bentley field, expected to yield more than 300 million barrels, to be developed given their proximity to the existing Kraken fields.
Carbon footprint?
Environmental campaign groups like Uplift, which successfully challenged the development of the Rosebank and Jackdaw oil fields, dismisses the industry argument as false.
“The Government is right to draw a line under new licensing which won’t slow the decline in oil and gas jobs or boost our energy supply. Claims to the contrary are false and a pipe dream. In the past decade, despite hundreds of licences being issued, new licences have delivered just 16 days’ worth of gas, while the number of jobs supported by the sector has more than halved,” the group said.
“The UK’s national interest is now in harnessing our clean energy, not clinging to an industry on its way out. This Government is showing that it is serious about securing the massive economic benefits from transitioning away from fossil fuels, and signalling as such to investors, while reassuring the public that it is equally serious about tackling the climate crisis.
Right business conditions?
Oil and gas firms say none of this is likely to take place unless the heavy tax burden the industry faces goes away. In 2022, the previous government introduced an oil levy or windfall tax which saw producers pay a headline rate of 78 per cent tax.
The move was introduced after oil firms reported skyrocketing profits due to a sharp rise in energy prices following Russia’s invasion of Ukraine. From 2030 the industry will return to paying 40 per cent. Many in the industry argue they should have gone already, vanishing when the windfall profits vanished.
The sprint to clean energy
A Department for Energy Security and Net Zero spokesperson said: “Oil and gas production will continue to play an important role for decades to come, with the majority of future production in the North Sea expected to come from producing fields or fields already being developed on existing licences.
“New licences awarded in the last decade have made only a marginal difference to overall oil and gas production.
“Only by sprinting to clean power by 2030 can the UK take back control of its energy and protect both family and national finances from fossil fuel price spikes.”
