UK Bans New Drilling in North Sea

Editor's note: Shortly after we published this article, the Department for Energy Security and Net Zero denied reports that Ed Miliband has banned the North Sea oil regulator from issuing any outstanding drilling and exploration licences, calling them “a complete fabrication”.

Energy Secretary Ed Miliband has enacted an immediate ban on new North Sea oil drilling licenses, overriding departmental officials and setting the stage for potential legal confrontations with oil companies. This decision halts the expected approval of new drilling in up to 35 areas, a process initiated during the 33rd offshore oil and gas licensing round in late 2023.

Miliband’s directive is aimed at aligning the UK’s energy policies with its climate commitments, but oil companies that had invested substantial monetary resources into preparing their bids are likely to retaliate with legal action in order to recoup the millions of pounds spent.

The North Sea Transition Authority had said only a day ago that the applications for the 35 areas were still being considered despite the regime change in the government. But the Energy Secretary has now made it clear that no licenses for new fields will be approved.

Miliband, a known opponent of oil and gas expansion, has argued that new licensing would not lower energy costs, enhance security, or provide a sustainable future for offshore energy communities. Instead, Miliband maintains, the UK must avoid reliance on fossil fuel markets, which are controlled by “petrostates and dictators.”

This stance has been met with considerable concern from the energy sector. Industry analysts highlight that the UK, which sources 75% of its energy from oil and gas, could face increased dependency on imports, undermining energy security. Offshore Energies UK warns that domestic production is already declining at 8% annually, a rate that could accelerate to 15% without new drilling initiatives.

The forthcoming policies detailed in the King’s Speech on July 17 will be crucial in shaping the future of the UK's energy landscape by detailing taxation plans for the country’s oil and gas industry.

By Julianne Geiger for Oilprice.com

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