Research has revealed that North Sea oil and gas companies in the UK are lagging in their transition to renewable energy, with three-quarters of them planning to focus exclusively on fossil fuel production until 2030. This data, compiled by the analyst firm Rystad, indicates that only seven out of 87 companies intend to allocate any funding toward renewable projects in the UK during this period. Furthermore, only two of those seven companies plan to make renewables a significant portion of their investment portfolios by 2030.
In response to this trend, the Labour government has enacted a ban on new licensing for oil and gas fields in the North Sea. Existing fields will still be permitted to operate, and pending licenses will not be revoked, allowing some potential fields in early licensing stages to proceed. Prime Minister Keir Starmer announced the establishment of a new, nationally owned entity called Great British Energy, which will be headquartered in Aberdeen. This initiative aims to emphasize the government’s commitment to a “just transition” toward clean energy, ensuring the creation of new jobs as the fossil fuel sector declines.
The industry has strongly opposed Labour’s licensing ban, facing significant criticism from Conservative Party members during the general election campaign. Research by Carbon Brief suggests that while the ban may hasten the decline of the North Sea oil sector, most fields are already severely depleted.
Campaigners have pointed to the recent findings as evidence that oil and gas firms are reluctant to alter their business models. Tessa Khan, executive director of Uplift, stated, “The oil and gas industry is clearly failing to deliver on its promises. The overwhelming majority of North Sea operators have no intention of investing in clean energy and are solely interested in profiting from oil and gas for as long as the North Sea’s dwindling resources allow.”
Khan also warned that the lack of investment in renewable energy could hinder the UK’s efforts to achieve net-zero greenhouse gas emissions by 2050 and limit job opportunities for oil and gas workers. She emphasized that the industry’s reluctance to transition is impacting supply-chain firms and communities reliant on these jobs, as employment linked to the sector has halved over the past decade.
In response to the criticism, a spokesperson from the Department for Energy Security and Net Zero stated, “We are engaging with industry, workers, and trade unions to provide certainty through a phased and responsible transition in the North Sea. Our national wealth fund, backed by over £7bn, will collaborate with industry to position the UK as a leader in green technologies, fostering job creation and investment nationwide.”