Key facts
- UK Prime Minister Andy Burnham has pledged a "pragmatic approach" to North Sea oil and gas extraction.
- Industry groups are urging the new government to approve controversial projects like the Jackdaw gas field and Rosebank oil project.
- The Aberdeen & Grampian Chamber of Commerce called for clearing regulatory logjams and replacing the windfall tax.
- Offshore Energies UK and other groups argued for continued drilling to support domestic energy production and manufacturing.
- Burnham's administration is expected to maintain Labour's fiscal discipline while reshaping economic policy.
Newly appointed UK Prime Minister Andy Burnham has stated he will adopt a "pragmatic approach" to oil and gas extraction in UK waters, acknowledging the resource's importance amid economic struggles. The UK energy industry, led by groups like Offshore Energies UK (OEUK) and the Aberdeen & Grampian Chamber of Commerce (AGCC), is urging Burnham's government to approve controversial North Sea projects, including Shell's Jackdaw gas field and the Rosebank oil project.
Burnham, who took office on July 20, 2026, has pledged a "new economic model" focused on long-term growth and regional energy control, while vowing to adhere to existing fiscal rules. The AGCC specifically called for the government to clear regulatory logjams, replace the windfall tax with a new Oil and Gas Revenue Levy, and adopt a more pragmatic stance on issuing new licences. They also requested faster approvals for renewable projects and expanded transmission infrastructure, advocating for a balance between the energy transition and continued domestic oil and gas production.
Industry lobbyists have written to over 400 Labour MPs, arguing that more drilling in UK waters would support homegrown energy, UK manufacturing, and its skilled workforce. While supporting the ambition for a secure, lower-carbon energy system, they emphasize that the transition would be stronger if built on an "all-energy approach" that leverages industrial strengths. The fate of the Jackdaw and Rosebank projects, which were licensed under the previous government, remains uncertain, though there are reports that Energy Secretary Ed Miliband may consent to Jackdaw.
Burnham's administration is expected to maintain Labour's fiscal discipline, with Shabana Mahmood's potential appointment as Chancellor signaling continued market-friendly economic policies. The energy industry argues that Britain will need oil and gas for decades and that producing these resources domestically reduces reliance on imports. Conversely, campaign groups like Uplift argue that new drilling will not enhance energy security without a rapid shift to renewables and assistance for households to reduce fossil fuel reliance.