The incoming government of Prime Minister Andy Burnham is set to announce fresh support for the North Sea oil and gas industry, sparking hopes of jobs and investment in the sector. However, the exact nature of the plans remains unclear, with several key decisions still pending.
The Rosebank and Jackdaw fields have been the subject of controversy, with environmental groups challenging the previous government's approval due to concerns over climate impact. While these decisions are still being reconsidered by the Offshore Petroleum Regulator for Environment and Decommissioning (Opred), it is unlikely that Burnham will confirm approval for these projects on his first day in office.
Another key issue is the Energy Profits Levy (EPL), a windfall tax introduced in 2022 with a headline rate of 78%. The industry has criticized the EPL, claiming it makes the North Sea one of the least favourable places for investors. The tax is set to be replaced in 2030 by another windfall tax, which operators prefer due to its lower rate when oil and gas prices are low.
Labour's 2024 election manifesto pledged to ban new oil and gas exploration licences, a promise carried out by Energy Secretary Ed Miliband soon after Labour came to power. The government has since allowed 'tie-backs' - production in unlicensed areas connected to infrastructure in already licensed areas - but the industry is eager for Burnham to reconsider the full licences to explore totally unknown areas of seabed.