Aerial view of an oil platform, North Sea, Aug 23, 2023. [Photo/Agencies]
The oil and gas industry in the United Kingdom has welcomed news that the government is leaving room for a "pragmatic" approach to production, despite an election manifesto promise to stop any new exploration licenses.
In 2023, UK oil production in the North Sea, between the UK and Scandinavia, was just 34 million tons, the lowest since the fields were opened in the 1970s and only around a quarter of the peak production figure in 1999.
The North Sea sector remains in decline but, according to trade group Offshore Energies UK, still accounts for more than 200,000 jobs across the country.
In its manifesto for the 2024 general election, the Labour Party said: "We will embrace the future of energy production and storage which will make use of existing offshore infrastructure and the skills of our offshore workforce."
But, while it also said, "oil and gas production in the North Sea will be with us for decades to come", the document ruled out any new licenses "because they will not take a penny off bills, cannot make us energy-secure, and will only accelerate the worsening climate crisis".
A consultation document published on Wednesday reaffirmed this commitment, but allowed room for maneuver through a system known as tiebacks, which allow new fields to be tapped from older neighboring facilities.
The Financial Times newspaper reported that publication of the government's consultation was held back several weeks because of concerns about how it would be received in Washington, where President Donald Trump has so actively encouraged oil and gas companies to renew exploration projects.
But Martin Copeland, chief financial officer at Serica Energy, a company that produces and sells gas and oil from 11 North Sea fields, said: "We are pleased to see that the government has appreciated that their campaign message was simple, but the reality is more complex and the industry will be pleased to give its input of how this can be translated into a pragmatic and workable new regime for the future of the North Sea."
The GMB union, a significant financial backer of the Labour Party, and Unite, the country's second-largest union, were among the most vocal critics of the government's original decision.
GMB General Secretary Gary Smith was quoted by The Guardian newspaper as saying: "In the new geopolitical reality, it's madness. If the North Sea is being prematurely closed down and we are increasing import dependence, that's bad for jobs, economic growth and national security."
Unite General Secretary Sharon Graham was reserved in her comments, until she could see how the policy would impact the livelihood her members.
"Until that happens, we need to resist any calls that amount to offshoring our carbon responsibilities for the sake of virtue signaling," she said. "We must not let go of one rope before we have hold of another."
David Whitehouse, chief executive of Offshore Energies UK, said: "We still have oil and gas reserves in our offshore waters and we should use them responsibly alongside renewable energy. We must get this right and this means meaningful engagement."
