North Sea oil and gas: Why the bridge to the future is being burned, as 600 Aberdeen job losses show

In the North-east of Scotland, we are not resisting the energy transition - we are leading it.

Companies like D2Zero exist for that very purpose - supporting the safe maintenance and operation of current energy systems, while reducing emissions, developing clean technologies, and enabling the shift to a low-carbon economy.

Our offshore energy industry is in decline, and hundreds of organisations and tens of thousands of people are trying to build a bridge over troubled water. But unlike the lyrics of the Simon & Garfunkel hit released as the UK’s oil journey began in the 1970s, there’s little to ease minds just now.

The foundations we need to build that bridge to the future are being eroded.

Over the past few weeks, 600 jobs have disappeared from the North Sea energy sector. You cannot drive forward an energy system fit for net zero while hollowing out the industries and expertise needed to build it. What’s happening today is not a managed transition. It’s a cliff edge.

The Total Culzean platform in the North Sea, about 45 miles east of Aberdeen. Picture: Andy Buchanan/AFP via Getty Images

We work at the heart of emissions reduction - deploying solutions and technology to help energy companies reduce their environmental impact whilst optimising their operations. Our entire business model is about helping industry do better, faster. But when the industry is undercut by policy, investment decisions stop. Innovation slows. And the energy transition we all want to see gets pushed further into the future.

READ MORE: North Sea oil and gas workers braced for 'unjust transition' as SNP ministers have 'no plan'

We need to talk about the Energy Profits Levy and, more importantly, the message it sends.

When it was introduced in 2022, oil prices were at record highs and household bills were spiralling. The principle of a temporary windfall tax was broadly accepted. But three years on, prices have stabilised, bills remain high, and investment in UK energy is slowing.

The levy now amounts to a 78 per cent tax burden on companies operating in UK waters - without the fiscal stability or investment relief seen in other nations. In Norway, for example, the government offers a 78 per cent rebate on exploration costs, meaning companies continue to invest with confidence.

Here in the UK, we are doing the opposite. And the consequences are already being felt. Projects are being shelved. Capital is leaving. Jobs are disappearing. The supply chain - which is central not just to oil and gas, but to offshore wind, hydrogen, and carbon capture - is being compromised at the precise moment we need it most.

READ MORE: North Sea leaders and energy workers urge Keir Starmer to scrap oil and gas windfall tax

There’s a misconception these are yesterday’s industries. That the skills and capabilities developed over 50 years in the North Sea are somehow incompatible with a net zero future.

The truth is the opposite. These are the people and businesses who can and will build that future. They are the ones who will lay the cables, engineer and build the platforms, deploy the carbon capture systems, and scale up hydrogen production. Without them, net zero doesn’t happen.

Meanwhile, credible analysts are warning the Energy Profits Levy (EPL) isn’t just stalling the transition - it’s actively damaging the UK economy.

According to investment bank Stifel, the EPL is “destroying” the North Sea oil industry, while simultaneously undermining energy security and long-term economic growth. The result has been a collapse in North Sea investment and - crucially - a sharp fall in the Treasury’s total tax take.

Energy prices have dropped significantly since the tax was introduced. Oil is down 50 per cent since the invasion of Ukraine, and gas prices are 80 per cent lower than their post-invasion peak. The windfall has evaporated - but the tax remains.

Stifel now estimates the UK will lose £3 billion in tax receipts between 2025 and 2030 because of the EPL. In their words: “The UK North Sea ‘windfall’ tax has not raised the additional revenue that was expected because there has not been a windfall to tax.”

This is the definition of a self-defeating policy. We are taxing an industry that no longer has record profits, driving away investment and jobs — and in return, receiving less revenue, not more.

And the longer-term damage goes even deeper. As Stifel point out, the UK’s increasing reliance on overseas oil and gas imports is not only a threat to energy security, it also threatens our climate goals. Without the North Sea, we simply offshore our emissions to places like Norway, Qatar and the US. It might make our own numbers look cleaner — but it pushes the climate problem elsewhere, along with thousands of skilled UK jobs.

Polling released last week shows overwhelming public support for a pragmatic approach. Nearly 70 per cent of UK voters would prefer domestic production over higher-emission imports. Just 27 per cent believe the windfall tax has helped reduce household bills. And three times as many people believe the tax is unfair than fair when told the true rate companies are paying.

The country is not calling for ideological purity. It is calling for energy security, jobs, and real progress on climate goals - and that means working with the industries that can deliver it.

I support the call for Keir Starmer, Rachel Reeves and Ed Miliband to come to Aberdeen. Not for a headline, but for a conversation. One that recognises the North Sea as a partner in the transition.

Ed Miliband, Secretary of State for Energy Security and Net Zero. Picture: Ian Forsyth/Getty Images

Because this isn’t just a North Sea issue or something that only affects the North-east of Scotland - this is a national challenge.

It’s about securing affordable, reliable energy for millions of people across the UK. Oil and gas will continue to play a vital role in keeping the lights on and heating our homes for years to come, powering everything from manufacturing facilities and public transport to medical supply chains and food production.

We are not asking for a handout. We’re asking for a plan. One that creates the right conditions to invest, decarbonise and grow. One that protects the people and the expertise we will need every step of the way. One that doesn’t make us choose between a job today and a climate solution tomorrow.

There is still time to get this right, but we need urgent action. That starts with ending the windfall tax before the next financial year.

- Bob Drummond is the chief executive of Aberdeen-based energy equipment and solutions firm D2Zero.