Britain could significantly reduce its reliance on imported oil and gas by relaxing North Sea restrictions and implementing tax changes, according to industry leaders. Offshore Energies UK (OEUK), an industry body, stated that tax reforms and the approval of new drilling licenses in the North Sea could unlock 111 new oil and gas projects, collectively valued at £50 billion.
Britain currently imports over 40 percent of its energy needs, making it vulnerable to global energy shocks. OEUK argues that without increased support, the country risks losing substantial economic opportunities, jobs, and energy security.
The industry group is advocating for the abolition of the current Energy Profits Levy (EPL), a 38 percent windfall tax on oil and gas producers set to be replaced in 2030, by January 2027. The sector has contended that the EPL has deterred investment because it remains in place even when wholesale prices fall.
In 2025, for the first time since North Sea production began, no exploration wells were drilled. Labour has implemented a ban on new exploration licenses in British waters. OEUK's report highlights that the 111 proposed sites are located within existing licensed areas.
OEUK Chief Executive David Whitehouse warned that a lack of "radical change" would lead to job losses, increased energy imports, and reduced national resilience. The report also recommended bringing forward the planned new Oil and Gas Revenue Levy, which would replace the EPL, from 2030 to 2027, with its application tied to oil and gas price spikes.
Decisions on the Rosebank and Jackdaw developments are also crucial, Whitehouse noted. He specifically pointed to the Jackdaw gas field, located approximately 150 miles east of Aberdeen, stating that delays in regulatory approval could impact gas supplies this winter. Jackdaw has the potential to supply up to 6 percent of Britain's gas needs for the 2026-27 winter.
The Jackdaw and Rosebank projects had initially received approval under the previous Conservative government but faced legal challenges on environmental grounds. These challenges have put other potential projects on hold pending decisions.
The OEUK report asserts that "fiscal reform and a pragmatic approach to licensing could unlock investment and improve long-term energy security," emphasizing the importance of strengthening domestic production to shield households and businesses from global shocks. The oil and gas sector supported an estimated 180,000 jobs across Britain in 2024.
Conversely, Tessa Khan, Director at environmental group Uplift, argued that new drilling would not lower bills or significantly enhance energy security. She stated that the UK exports the majority of its remaining oil and gas and that the scientific consensus indicates the world already possesses more fossil fuels than can be safely burned to limit global warming.
A government spokesperson commented that they are providing the sector with certainty and planning to replace the EPL by 2030, or earlier if the price floor is triggered. The spokesperson also mentioned ongoing record investments to foster a prosperous and sustainable North Sea future while growing clean energy industries.