Securing the future of the UK North Sea: a balanced path to net zero

2025 marks a pivotal year for the future of the UK North Sea. The government is currently reviewing the flawed energy profits levy and consulting on "Building the North Sea’s energy future". Both consultations are critical to ensuring long-term investment in upstream oil and gas as well as low-carbon industries. 

While the latter consultation is broad in scope, two of the government's key proposals include: 
• not issuing new licences to explore for new fields 
• taking a science-aligned approach to future UK Continental Shelf (UKCS) production 

Fill in the form to receive a complimentary extract from our recent report on this topic, or read on for a brief overview. 

Why smarter licensing and continued domestic production matter 

Rather than banning new exploration licences, the UK should adopt a smarter licensing policy. This would focus on known discoveries that can tie back to existing infrastructure, enabling critical production hubs to operate for longer. 

Our analysis shows that UKCS production outperforms the Intergovernmental Panel on Climate Change (IPCC)’s net zero pathway for scope 1, 2 and 3 emissions (aligned with 1.5°C of warming) by 25 to 50 million tonnes of CO₂ equivalent (MtCO₂e) per year through to 2050. 

This means the UKCS could produce 2.6 billion barrels of oil equivalent (boe) more than currently forecast, equivalent to a 50% increase in commercial reserves, and still remain within the IPCC pathway. 

To be clear, such production levels are highly unlikely in an ultra-mature basin like the UKCS. However, the analysis highlights that there is substantial headroom for responsible production. Even in a net zero scenario, the UK is expected to consume around 500,000 boe per day and remain a net importer of oil and gas. 

Our findings also show clear emissions and cost benefits if more UKCS production displaces imported liquefied natural gas (LNG): 

• Each additional trillion cubic feet of UKCS gas produced could save 15 MtCO₂e in scope 1 and 2 emissions if it replaces US LNG imports
• On a short-run basis, UKCS gas costs nearly half as much as US LNG, which is expected to dominate UK gas supply in the longer term 

The more the UKCS produces, the lower the emissions and the less the UK will spend on energy imports. A balanced approach to production will support the North Sea for decades to come and help secure its role in a clean energy future. 

To learn more, fill in the form above to receive your complimentary extract.