Offshore Energies UK (OEUK), the trade association for the nation’s offshore energy sector, claims the United Kingdom could meet half of its oil and gas demand domestically if the government implemented supportive policies. A recent industry report from OEUK suggests that changes to the Energy Profits Levy and regulatory approval for key projects such as Rosebank and Jackdaw could facilitate 111 new projects, attracting approximately £50 billion in investment.
The call for policy adjustments comes as North Sea output has experienced a decline, with projections indicating that domestic supplies will only fulfil around a third of the UK’s energy needs until 2050.
OEUK, which represents a range of interests including oil, gas, offshore wind, hydrogen, and carbon capture and storage, advocates for the current Energy Profits Levy (EPL) to be replaced. Introduced on 26 May 2022, the EPL was designed to tax the profits of oil and gas companies during periods of high prices.
The levy’s rate increased to 38% from 1 November 2024 and is legislated to end on 31 March 2030, or earlier if an Energy Security Investment Mechanism (ESIM) is triggered by sustained low oil and gas prices.
The industry asserts that the EPL has deterred investment, citing that for the first time since North Sea production began, no exploration wells were drilled last year. OEUK proposes an “Oil and Gas Revenue Levy” that would activate only during price spikes..
Environmental campaign group Uplift has criticised the industry’s report, characterising its proposals as a “fantasy.” Uplift argues that the North Sea is a “ultra-mature” basin with limited remaining reserves and contends that new drilling will neither reduce energy bills nor significantly enhance energy security, as much of the extracted oil is destined for international markets.
Tessa Khan, Uplift’s Director, stated: “The UK has burned most of its gas and what’s left is mostly oil, the vast majority of which is exported and sold on international markets. New drilling will do nothing to bring down bills and little for energy security. The science is clear that the world already has far more oil and gas than can ever be safely burned if we are to limit warming. Instead of listening to the ‘self-interested demands’ of the oil companies, Andy Burnham should instead be listening to people whose homes were destroyed in the summer’s wildfires.”
OEUK maintains that the industry supported 180,000 jobs across the UK in 2024. The organisation’s report stresses that “fiscal reform and a pragmatic approach to licensing could unlock investment and improve long-term energy security,” asserting that boosting domestic energy production is crucial for “protecting households, businesses and the wider economy from global shocks.”
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Enrique Cornejo, OEUK Policy Director, commented: “Britain is at a critical juncture. Our industry is ready to invest and deliver more homegrown oil and gas, but the window for action is narrowing. Without urgent policy decisions, the UK risks increasing its dependence on imports, losing high-value jobs.”
A UK government spokesperson reiterated its commitment to providing the sector with “long-term certainty to plan, invest and support jobs,” referencing plans to replace the EPL by 2030 or earlier if its price floor is triggered.
Conservative energy spokesperson Andrew Bowie described refusing to approve Jackdaw and Rosebank as “madness,” stating: “These figures from OEUK show that scrapping the Energy Profits Levy will protect jobs, safeguard our energy security and stabilise investment. Ultimately, this report sends a stark message that Labour’s absurd North Sea energy policies risk bringing a premature end to our oil and gas sector as we know it.”
