UK Labour Party Approves More North Sea Drilling

The UK Labour government plans to ease restrictions on new oil and gas drilling in the North Sea as part of its North Sea Strategy.

sarah

Nov 26, 2025 - 22:58

UK Labour Party Approves More North Sea Drilling

Plans to ease restrictions on new oil and gas drilling in the North Sea will be unveiled on Wednesday as part of the government's North Sea Strategy.

Chancellor Rachel Reeves will announce the publication of the strategy in the budget. The Department for Energy Security and Net Zero will release a document on it soon.

The strategy is expected to take a more liberal approach to the manifesto's promise to ban new oil and gas exploration by using larger extensions to existing fields.

The idea of allowing new drilling in a way that could be "connected" to existing fields was first raised at the Labour Conference in September.

The findings of the North Sea Review will not directly address ministers' decision to approve the controversial Rosebank field, which Ed Miliband strongly opposed while in opposition.

That project is the subject of a separate and ongoing regulatory and judicial process. However, it is believed that further easing of regulations will increase the likelihood of Rosebank ultimately receiving approval. Tiebacks are already used for small, remote extensions of existing oil and gas fields that extend into geologically unlicensed areas of the seabed.

Rosebank is a large facility that requires its own production infrastructure.

UK Government 'Very Wrong'

There is also speculation that the 78% windfall tax – which is due to expire in 2030 – may already be abolished.

The oil and gas industry has been lobbying heavily in recent months for changes to the windfall tax, or Energy Profits Levy, which they say is weakening the industry.

Investment is at an all-time low, and operators are instead looking to spend their money in parts of the world where tax rates are more favorable.

Research by Robert Gordon University in Aberdeen estimates that around 1,000 jobs are currently being lost every month.

It is understood that giving the green light to "tie-back" would be considered a hollow gesture without at least some tax relief.

A kind of "cap and floor" mechanism appears to be the most appropriate course of action for the government, which would be implemented when oil prices return to the high levels seen after Russia's invasion of Ukraine.

The industry argues that the subsequent drop in crude oil prices shows that the "windfall advantage" is over and that taxation should also reflect this.

Russell Borthwick, Chief Executive of the Aberdeen and Grampian Chamber of Commerce, criticized the UK government, calling its North Sea policy "deeply flawed."

He said, "This is a first step towards repairing the damage that has already been done – but as long as the Energy Profit Levy remains in place, this change alone will not prevent the loss of jobs and investment in our oil and gas industry."

Mr. Borthwick said that maintaining the EPL "will ensure that thousands more jobs will be lost."

He predicted that more companies will leave the North Sea.

He said, "The Chancellor should signal a move away from this tax today, and this change should come in 2026, before it is too late."