The UK Government has announced a relaxation of restrictions on new oil and gas licences in the North Sea as part of a package of measures associated with the Autumn Budget.
Chancellor Rachel Reeves unveiled plans to introduce new Transitional Energy Certificates that will allow new exploration as extensions to existing fields as part of the government’s North Sea Strategy.
The move comes after publication in August of an independent review by Professor John Underhill, Director of Energy Transition at the University’s Interdisciplinary Institute which identified the policy change could offer a solution for investment and growth, increase energy security, address environmental sustainability and global climate impacts while remaining consistent with Labour’s manifesto commitment of no new licences.
His review recommended a number of actions for government to consider:
- Permit near-field and infrastructure-led linked activity via tie-backs Allow bespoke oil and gas permits around strategic and critical infrastructure consisting of existing pipelines and fields to unlock modest but high-impact discoveries
- Strengthen regulation and stewardship Eliminate routine flaring, incentivise platform electrification and support carbon storage to reduce emissions from domestic production.
- Safeguard critical infrastructure Ensure existing pipelines and platforms remain economically viable to prevent premature shutdowns and stranded reserves.
- Support industry confidence Provide clear signals that strategic projects can proceed to maintain investment, encourage economic growth, safeguard jobs and maximise tax revenues.
The new North Sea Future Plan sets a clear path to grow clean energy industries, support the management of existing oil and gas fields for their lifespan, and help North Sea workers and communities make the transition.
As suggested by Professor Underhill in his proposals, the new Transitional Energy Certificates will enable limited oil and gas production on or near to existing fields - so long as this additional production does not require new exploration and is already part of or links back to existing fields and infrastructure, and is necessary for a managed, orderly and prosperous transition.
Welcoming the news, Professor Underhill said: “Today’s announcement that the Government has changed its policy to permit tie-back of discoveries and fields to existing infrastructure is a strong indication it has interrogated and accepted the data and evidence that underpinned the research undertaken in the Centre of Energy Transition at Aberdeen University, accepted the licensing solution I proposed in August, and accepted the case to extend the life of the North Sea to provide energy security that I made.
“Whilst many in the sector may argue that it does not move the dial enough for companies to invest and they will continue to demand changes to the EPL, the shift in the Government’s position on licensing is a clear signal that they are willing to listen and shift position when presented with a logical case for doing so, and that should be applauded.”