BP has announced it is placing its entire North Sea business on the market, signaling the end of its 60-year operational history in the region. This decision represents a fresh setback for Aberdeen, a city that transformed into a boomtown during the North Sea oil era, boasting Britain's highest concentration of millionaires.
The North Sea oil boom began in earnest in 1975 when Queen Elizabeth II officially switched on BP's Forties oilfield operations, discovered five years earlier and located 170 miles off Aberdeen. This marked Britain's first North Sea oil strike, injecting significant revenue into the UK economy and establishing Aberdeen as the heart of Europe's energy revolution. The city saw an influx of thousands of workers, American oil tycoons, and rapid economic growth, leading to low unemployment and high earnings.
However, the glory days are now firmly in the past. The city has experienced a stark decline, with high-class hotels, bars, and restaurants closing. Top retail stores like John Lewis, Debenhams, and Marks and Spencer have shut down, and the main shopping areas are now populated by vape and charity shops. Property prices have fallen to 2007 levels, and beggars and unemployed teenagers are a common sight, with families relying on foodbanks. Unemployment in Aberdeen stands at 3.9 percent, and over 20 percent of working-age individuals are economically inactive.
Recent years have seen a significant downturn exacerbated by a slump in oil prices in 2014 and a shift in UK government policy towards Net Zero environmental targets. The Labour government's manifesto for 2024 included a commitment to ban new drilling licenses for the North Sea, a policy previously championed by former Energy Secretary Ed Miliband. This prohibition has been seen as a blow to the industry, with projections indicating that as many as 200,000 well-paid jobs could disappear.
BP's decision to exit the North Sea has been described as a "deadly serious wake up call" for the future of the UK's natural resources. Despite earlier assertions of untapped potential, BP chief executive Meg O'Neill stated that the company believes its North Sea business would be better positioned under different ownership. Industry figures suggest BP's departure may stem from a lack of clarity on future UK energy policy.
There are indications of a potential shift in Labour's stance on North Sea drilling. Andy Burnham has suggested a "change of emphasis" on North Sea projects, acknowledging the resource's potential to ease the cost-of-living crisis and noting that the UK "can't ignore" it given tight public finances. Experts estimate that lifting the ban could generate £25 billion in additional tax revenues over the next decade and support thousands of jobs.
Residents in Aberdeen have expressed a mix of resignation and anger. Offshore worker Michael Donaldson, 51, stated that major companies like BP are leaving after making their profits, while former oil rig workers noted a decline in industry conditions and pay as far back as the 1990s. Others voiced frustration with the government's perceived lack of investment and decision-making.
Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, called BP's announcement a "stark reminder that confidence in the UK Continental Shelf has been badly shaken after years of policy uncertainty, punitive taxation and mixed messages." He questioned how many more jobs would be lost before the UK government takes action.
BP has previously divested other North Sea assets. The Forties field itself was sold to Apache Corporation in 2003, and the Forties Pipeline System was acquired by Ineos in 2017. The sale of BP's remaining five production hubs, which employ approximately 1,100 people, could generate around £2 billion. This departure marks the end of an era for the company in the North Sea, with its logo set to vanish from the region after six decades.