Another seven billion barrels of oil could be extracted from North Sea, industry says

Another seven billion barrels of oil could be extracted from the North Sea, if new projects can be developed, according to the offshore industry.

Offshore Energies UK (OEUK), which represents the sector, says half of the oil and gas the UK needs before 2050 could be produced domestically.

OEUK says the UK is currently on course to produce four billion barrels of the 13 to 15 billion needed in the next 25 years.

The industry body warns that only by allowing new fields will the country become less reliant on imports.

“We need oil and gas, so obviously the right thing must be to produce it ourselves,” David Whitehouse, chief executive of OEUK, said.

“It supports our jobs, puts value into our economy, produces it at a lower carbon footprint than the imports.

“What it also does is support the very supply chain that we need for renewables.

“So, it’s the right thing to accelerate renewables but let’s do that alongside producing responsibly our own oil and gas.”

In its Business Outlook Report, OEUK argues further fields and developments could add an additional £150bn to the economy.

The report adds: “Using its own resources would help build energy security, support the exchequer and benefitting the environment.”

The report also finds 91% of firms surveyed said general business sentiment was worse or significantly worse than a year ago.

Tax was a key concern for many of the businesses questioned.

The industry has been heavily critical of the windfall tax, officially known as the Energy Profits Levy (EPL), introduced in 2022 on the back of the invasion of Ukraine by Russia.

Labour increased the EPL to 38% last year and extended it until March 2030.

However, it recently confirmed it would end the windfall tax in five years.

It has now launched two consultations for the sector to respond to – one on the future of the North Sea and another on the tax which will replace the EPL.

However, environmental campaigners argue a significant amount of the additional oil and gas would be exported instead and won’t benefit UK households.

Tessa Khan, a climate lawyer at the group Uplift, said: “Implied in the economic conditions are basically conditions that make oil and gas extraction in an ageing, declining basin more profitable.

“That’s going to require lower tax rates on the industry or higher oil and gas prices, which is what has driven up people’s household energy bills this winter and in recent winters to the point that millions of people are in fuel poverty.”

The industry is waiting for the results on the UK Government’s consultation of the so-called Scope 3 emissions.

Those emissions are from the burning of oil and gas by consumers, including heating and fuel.

That has been central to a legal challenge to the Rosebank and Jackdaw fields in the North Sea.

The industry argues there are billions of barrels of oil in undeveloped fields in the region and warn the UK is too reliant on other countries.

The report says: “The UK is projected to be import-reliant for half of our oil and 90% of our gas in 2050.”

OEUK has also called for a clear plan for carbon capture and storage projects, including the Acorn project in Aberdeenshire.

It says around £9bn every year could be invested from now to the end of next decade in fixed offshore wind, with “large growth towards the end of the decade” in floating offshore wind.

A UK Government 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.”