Energy Secretary Ed Miliband said it is a ‘world-leading’ plan
The UK Government will allow extraction of oil and gas near existing fields as it looks to expand North Sea production without issuing new licences.
Labour was adamant in the 2024 election campaign that new licences would not be issued for oil and gas extraction.
But warnings from the industry over the implications of fields like Rosebank and Jackdaw being rejected and the knowledge that fossil fuels will form part of the UK’s mix in the coming decades has led to the decision.
Following a months-long consultation, the Government announced the move as part of its North Sea Future Plan on Thursday, less than an hour after Chancellor Rachel Reeves rejected calls from Scotland’s north east to scrap the windfall tax on oil and gas giants.
Under the scheme, new “transitional energy certificates” will be made available, which will allow producers to drill in areas “adjacent” to current fields, provided there is no exploration undertaken and the move would be required to ensure the existing field is viable.
The 127-page response to the consultation said: “To help ensure a managed, orderly and prosperous transition, we will introduce new ‘transitional energy certificates’.
“They will give the holder exclusivity over a specific area of the seabed.
“These areas of the seabed must be adjacent to an existing licensed block and will be managed on an ‘out of round’ basis by the North Sea Transition Authority.”
The areas must be “well understood”, the document said, with their size expected to be limited to the amount of known oil and gas in the field.
The Government also views this option as one which could be online faster than other fields, which would typically require years of exploration before production begins.
Along with the new licences, the Government will also establish the North Sea Jobs Service, a programme designed to help current oil and gas workers into jobs in other fields like defence, advanced manufacturing or renewables.
Speaking after the plan was announced, Energy Secretary Ed Miliband said: “The North Sea’s workers and communities have helped power our country and our world for decades. This is our plan to ensure they continue to do so for many decades to come.
“This is a world-leading plan with workers, unions, businesses, and communities at its heart, and implements in full the Government’s manifesto commitments. It is a plan which will ensure that the North Sea is an energy powerhouse throughout the 21st century.”
Stuart Payne, chief executive of the North Sea Transition Authority, said: “This plan provides clarity and direction for the energy industry, as well as for the North Sea Transition Authority as an organisation.
“We will work together with Government and industry to ensure that we continue to drive forward the transition as an enabling regulator, delivering the next chapter for the North Sea and all who rely on it.”
