Report: UK Could Ban New North Sea Oil and Gas Exploration Licenses

March 15, 2021

Ministers in the UK are reportedly looking to put an end to new offshore oil and gas exploration licenses as part of the country's "net-zero" ambitions, the Sunday Telegraph said in a report released over the weekend, citing an unnamed industry source.

The newspaper said its source told it that a decision to ban new oil and gas licenses in the UK was close, with the article's authors labeling the potential move as a „beginning of the end of the North Sea oil industry,“ and said the ban would be „particularly controversial“ in Scotland, where almost 40 percent of the UK's total oil and gas workforce is employed.

Worth noting, the article says that options considered include a ban on new licenses in 2040, an immediate temporary halt in licensing, but also, it is possible that there wouldn't be any changes. (Read the full article here – registration required).

Responding to the article, Oil and Gas UK, a UK-based industry body representing interests of the local offshore oil and gas industry said that any ban as proposed in the article could hinder the UK’s ability to deliver a net-zero future, damage, domestic supply chain, increase energy imports and affect local jobs and skills.

OGUK Sustainability Director Mike Tholen said:"The UK’s offshore oil and gas industry recognizes the urgent need for change and was one of the first sectors to commit to be a net-Zero industry by 2050, setting demanding interim targets to halve its own emissions by 2030.

“By working together, we can help deliver the energy transition, providing the oil and gas the UK will need for decades to come while cutting the impact on the environment.  Any curtailment of activity by licencing constraints risks impeding the UK’s ability to deliver a net-zero future, damaging our domestic supply chain and increasing energy imports whilst exporting the jobs and skills.

“Our industry is leading the way on green technologies including the switch to hydrogen and long-term storage of CO2. Achieving this through UK companies will require significant investment and we continue to work constructively with government to show this industry has the essential expertise and commitment to ensure delivery."

Elsewhere in Europe, Denmark, the EU's largest producer in December 2020 said it would put an end to all oil and gas exploration and extraction in the North Sea by 2050, and it also canceled its latest licensing round and any future licensing rounds. 



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