Andy Burnham, the leader of the Labour party, is facing renewed pressure to abandon plans for a ban on new oil and gas drilling after BP announced it is selling its North Sea business.
The oil giant, which has operated in UK waters for 60 years, stated that its North Sea division, employing 1,100 people, would be better positioned under new ownership. This decision has prompted business leaders to warn that the UK oil and gas industry is at a critical juncture.
The Aberdeen & Grampian Chamber of Commerce (AGCC) attributed BP's exit to "years of policy uncertainty, punitive taxation and mixed messages" from the government. Conservative leader Kemi Badenoch has called on Burnham to "stop faffing about and allow new oil and gas licences before it's too late."
Concerns have been raised that a perceived hostility from Labour and the Scottish National Party (SNP) towards new drilling, coupled with a 78% windfall tax on energy company profits, is deterring investors and contributing to job losses.
Brian Gilvary, former finance chief at BP and now chair of rival INEOS Energy, commented that the combination of the punitive tax and the drilling ban has "effectively shut down investment."
The Prime Minister has pledged a "pragmatic approach" to offshore resources, but specific details remain scarce. Energy Secretary Miatta Fahnbulleh is expected to decide within weeks on applications for the Rosebank oil and Jackdaw gas fields.
BP's involvement in the North Sea began in 1964, and its discovery of the Forties field in the 1970s was a significant moment for the UK economy. However, last year, its North Sea operations accounted for less than five percent of its total daily production.
Douglas Lumsden, the Conservative MP for Aberdeen South, stated that BP's decision serves as a "dire warning" for the Labour government, urging them to "urgently change course." He specifically cited Labour's increased and extended windfall tax as a major factor.
Scottish First Minister John Swinney acknowledged the "time of real uncertainty for workers" and criticized "Westminster's supertax on jobs" for harming Scotland. He called for the abolition of the Energy Profits Levy to protect jobs.
AGCC chief executive Russell Borthwick described BP's announcement as a "defining moment" for the new Prime Minister, questioning how many more jobs must be lost before the government acts. He added that BP's decision is not isolated but signals that the UK is "at a crossroads."
David Whitehouse, CEO of Offshore Energies UK, called BP's departure a "significant moment" that should prompt "serious reflection." He emphasized that while BP may be leaving, the future of the industry, jobs, and dependent communities still lies within the UK government's power to decide.
Scottish Secretary Douglas Alexander affirmed that "North Sea oil is a vital national asset" and that oil and gas will remain part of the country's energy mix for years to come. However, his Conservative counterpart, Andrew Bowie, blamed "Labour's disastrous Net Zero dogma" for BP's situation and urged for the approval of the Jackdaw and Rosebank sites and the cancellation of new licensing bans.