3.2 billion more barrels of oil and gas in North Sea than government estimates, says report

A new study says the additional production could add £165 billion in economic value

Up to 7.5 billion barrels of oil and gas could still be produced from the North Sea, 3.2 billion more than current government estimates, a new report says.

An independent study by Westwood Global Energy Group on behalf of Offshore Energies UK (OEUK) found the additional production could add £165 billion in economic value.

David Whitehouse, chief executive of OEUK, called on ministers to “back pragmatic homegrown production” and protect 200,000 jobs across the UK.

An oil platform | PA

The new study - which draws on geological data to identify remaining so-called recoverable volumes - found more than 7 billion barrels are geologically proven and technically accessible, with 7.3 billion within reach of existing infrastructure.

OEUK said the findings mean the UK could meet half of its oil and gas needs from the North Sea, almost double what is currently forecast.

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However, it warned that without government support the UK risks a faster North Sea decline, which could see it become dependent on oil and gas imports for 80 per cent of its needs within this decade.

The industry has been calling for continued licences and changes to the windfall tax, with the UK government expected to outline its policies this autumn following two major consultations.

The new report comes ahead of OEUK’s annual conference in Aberdeen on Tuesday, where over 300 delegates from the sector will discuss the future of the North Sea. This month also marks 50 years of North Sea oil and gas production.

Mr Whitehouse said: “This independent report shows the UK can make much better use of its own North Sea oil and gas to power the country, protect jobs, and cut the need for imports, all while we also accelerate renewables. This is not about oil and gas versus wind but about whether we prioritise homegrown oil and gas over imports.

“The UK is at a record 40 percent of imported energy, with policy decisions not geology driving an accelerated decline in North Sea production. In an increasingly volatile world, if we act now, the UK can meet more of its oil, gas and renewables needs from homegrown resources – we need it all.

“This is the approach being taken by countries like Norway and New Zealand which combines energy security with climate leadership..

“Our message to government is to back pragmatic homegrown production, unlocking an additional £165 billion of economic value to the country, protecting 200,000 jobs and meeting our climate goals. This means supporting continued production oil and gas in UK waters and bringing forward changes to the windfall tax when the government responds to key consultations expected this autumn..

“These are important times – back our North Sea energy and together we can help back the future of the UK.”

OEUK said the UK’s offshore basin is naturally declining – with over 280 active oil and gas fields today, but around 180 expected to cease production by 2030.

To avoid a steep drop in domestic supply, it said, the UK needs a steady flow of new developments to replace what is running out.

It warned that once hubs are switched off, it will be near impossible to turn them back on should the UK need the reserves.

It said the new report shows most of the remaining viable oil and gas is within 50 kilometres of existing hubs, meaning it can be developed “quickly and cleanly”.

There are currently 67 hubs producing or under development. These consist of fixed and floating oil and gas production platforms which house offshore workers and host production equipment, as well as undersea infrastructure such as pipelines.

OEUK said the report shows the next five years are crucial for slowing the rate of decline from existing hubs, with three of the largest based in the West of Shetland region.

A spokeswoman for Department for Energy Security and Net Zero said: “As the Prime Minister has said, the clean energy mission is in the DNA of this government – because it is the route to energy security, lower bills, and good jobs for our country.

“Oil and gas production in the North Sea will be with us for decades to come, and we will deliver a fair and prosperous transition by managing the existing fields for the entirety of their lifespan.

“We have already taken rapid steps, with the biggest ever investment in offshore wind and carbon capture and storage clusters.”

Last week, the UK Government published guidance on how it will consider applications for oil and gas projects.

The Supreme Court ruled last year that emissions created by burning fossil fuels should be considered when granting planning permission for new drilling sites, in a case that focused on an oil well in Surrey but reverberated through the energy sector.

A challenge brought by environmental campaigners in the wake of the Supreme Court ruling, over approval for the Rosebank oil field north-west of Shetland and the Jackdaw gas field off Aberdeen, was upheld at the Court of Session in Edinburgh in January.

Greenpeace and Uplift had argued the UK Government and North Sea Transition Authority (NSTA) had acted unlawfully when granting consent to the projects, as environmental impact assessments did not take into account downstream emissions resulting from the burning of the extracted fuels.

The Government has now published guidance on how the environmental impacts of oil and gas – including their downstream “scope three” emissions created when the fossil fuels are burned – are included in assessments.

Officials said offshore developers will now be able to submit applications for consent to extract fossil fuels in oil and gas fields that are already licensed, which includes Rosebank and Jackdaw.

Energy Secretary Ed Miliband will “consider the significance of a project’s environmental impact, while taking into account and balancing relevant factors on a case-by-case basis – such as the potential economic impact and other implications of the project”, the Government said.

Labour has previously ruled out issuing new oil and gas licences for the North Sea, but Prime Minister Sir Keir Starmer has said the fuels will be needed for decades to come and indicated he would not “interfere” with existing licences.