Key facts
- The UK's North Sea oil industry is urging incoming Prime Minister Andy Burnham to approve new drilling in UK waters.
- Industry groups argue that continued drilling supports domestic energy production, manufacturing, and jobs.
- The appeal comes as the government considers final consent for the Rosebank oil and Jackdaw gas projects.
- The industry advocates for an "all-energy approach" that includes fossil fuels alongside renewables.
- Concerns were raised about high UK business energy costs impacting competitiveness and productivity.
The UK's North Sea oil industry has made a final appeal to Andy Burnham, who is expected to become Britain's next Prime Minister, to approve new drilling in UK waters. Industry lobbyists have written to over 400 Labour MPs, arguing that continued domestic oil and gas production is essential for supporting the nation's manufacturing sector, industrial capability, and skilled workforce, aligning with Burnham's agenda to tackle deindustrialisation.
The letter, co-signed by Offshore Energies UK (OEUK), various oil and gas business groups, and the GMB trade union, supports the government's ambition for a secure, lower-carbon energy system but stresses that this transition would be stronger if built upon existing industrial strengths. Burnham has vowed to safeguard sovereign manufacturing and production capabilities in critical sectors like energy.
The approach to the North Sea under the new Labour government remains unclear. While the party previously pledged to ban new exploration licenses, the fate of the Rosebank oil project and the Jackdaw gas development, which were licensed under the previous administration, is in limbo. Energy Secretary Ed Miliband is reportedly considering granting final consent for the Jackdaw project, which could begin producing gas this winter, to demonstrate his credibility as a potential successor to Chancellor Rachel Reeves. Rosebank, which would produce oil for export, would take longer to come online.
OEUK contends that Britain will require oil and gas for decades and should prioritize domestic production over increasing reliance on imports. The Chemical Industries Association supports this view, stating that backing North Sea oil and gas alongside renewables enhances industrial competitiveness and reduces import dependency. However, campaign group Uplift argues that new drilling will not improve energy security and advocates for a rapid shift to abundant renewable energy sources and support for households to move away from fossil fuels.
Furthermore, a report by the CBI and Energy UK highlighted that Great Britain's electricity prices are approximately 45% higher than the G7 median, acting as a significant drag on productivity and competitiveness. The CBI's chief economist emphasized that reducing business energy costs should be a top priority for the new Prime Minister to encourage investment and global competitiveness.