- Investment in the UK’s North Sea oil and gas sector has significantly exceeded previous projections.
- The production outlook has been slightly revised upwards, challenging the “sunset industry” narrative.
- This investment surge occurs alongside the UK’s efforts to accelerate renewable energy development.
So much for the “sunset industry” narrative.
Britain’s North Sea oil and gas sector just pulled a fast one on the doomsters. The UK’s North Sea Transition Authority (NSTA) says 2024 investment came in at nearly £6 billion—more than 50% above what it predicted last fall. And while 2025 spending is expected to cool a bit to £4.8 billion, that’s still miles ahead of previous projections.
Why the sudden confidence? It turns out that, despite windfall taxes and policy zigzags, companies are still finding reasons to open their wallets for new oil and gas developments.
The production outlook got a slight facelift, too. Last year’s output averaged 1.09 million barrels of oil equivalent per day (boepd)—about 20,000 boepd more than expected. That’s not game-changing, but it’s enough to raise an eyebrow. Still, the NSTA expects output to drop by nearly half to 0.62 million boepd by 2030. So yes, the decline is real—but it’s not in a nosedive just yet.
It’s a fascinating backdrop to the UK’s ongoing soul search about the North Sea’s future. Green goals are speeding up—just last week, Ofgem fast-tracked $5 billion in grid infrastructure to keep up with clean energy projects. But as demand keeps surging—thanks to AI data centers and air conditioning—even the cleanest grid in the world needs backup, and right now, oil and gas are still doing the heavy lifting.
In February, the UK government set out proposals to reform planning consent criteria and the flagship scheme for awarding renewable projects, aiming to fast-track the rollout of clean energy as Britain targets clean power by 2030, but don’t count the North Sea out of the oil game just yet.
By Charles Kennedy for Oilprice.com
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