The UK government is facing mounting pressure over its North Sea oil and gas policies, with industry sources suggesting ministers may be preparing to allow new drilling projects despite a manifesto pledge to ban them. The speculation comes as Nigel Farage's Reform UK targets the sector, vowing to reverse Labour's ban on fresh drilling if elected in 2029.
Senior government advisers have reportedly told investors that new projects could proceed if they are close to existing pipeline infrastructure and avoid 'greenfield' areas. One energy investor claimed that advisers in the Treasury and No 10 had 'quite openly' signalled that the door would be left open for new oil and gas projects, despite climate commitments. However, these claims contradict the stance of Ed Miliband, the energy secretary, who has previously described plans to develop the Jackdaw and Rosebank oilfields as 'an act of climate vandalism'.
The North Sea contributes £25bn annually to the UK economy, supporting over 200,000 jobs, according to Offshore Energies UK. Industry sources believe the Treasury is anxious to protect these jobs and tax revenues, especially as domestically produced oil and gas are replaced by imports from Qatar and the US. One source predicted that the Treasury would ultimately win internal battles with the Department for Energy Security and Net Zero over what constitutes a 'new licence'.
Labour's manifesto offers some flexibility: it promised not to issue new licences for exploring new fields but also not to revoke existing licences. This means projects like Rosebank, Jackdaw, and Cambo, which were granted licences by the previous government, could receive final consent without breaching the pledge. Additionally, 'in-fill drilling' within existing licensed areas may be permitted.
The government has already faced backlash over other high-profile policies, including benefits and winter fuel allowances, leading to speculation that its North Sea position could be the next to shift. With Reform UK gaining support by targeting net zero policies, Labour may be forced to balance its green agenda against the need to protect jobs, revenue, and votes.
