A potential ban on new exploration licenses in the North Sea would have limited impact on the medium- and long-term outlook.
That’s according to Rystad Energy analyst Sonya Boodoo, who communicated with Rigzone after a Telegraph story reported the UK was mulling a ban on new oil exploration licenses in the North Sea and considering ending permits in 2040.
“The UK is a mature region with limited exploration upside in that time frame,” Boodoo said in the statement. “In terms of production, we forecast that less than five percent of production will come from yet to be awarded acreage by 2040,” Boodoo added.
In response to the Telegraph article, Oil & Gas UK’s (OGUK) sustainability director Mike Tholen said, “any curtailment of activity by licensing constraints risks impeding the UK’s ability to deliver a net-zero future, damaging our domestic supply chain, and increasing energy imports whilst exporting the jobs and skills”.
“The UK’s offshore oil and gas industry recognizes the urgent need for change and was one of the first sectors to commit to be a net-zero industry by 2050, setting demanding interim targets to halve its own emissions by 2030,” Tholen stated.
“By working together, we can help deliver the energy transition, providing the oil and gas the UK will need for decades to come while cutting the impact on the environment,” he added.
When asked to confirm if the UK was considering a ban on new oil exploration licenses in the North Sea, the UK Department for Business, Energy, and Industrial Strategy (BEIS) highlighted that a review the government launched on the future UK offshore oil and gas licensing regime in September last year was still ongoing. A BEIS spokesperson also sent the following response to Rigzone:
“Our review into the future of the oil and gas licensing regime seeks to ensure it remains compatible with our target to reach net zero emissions by 2050. This commitment also forms part of the Energy White Paper published in December”.
“We will agree a transformational North Sea Transition Deal with industry in the coming months to create jobs, retain skills, and deliver new business and trade opportunities to support the sector’s transition to a lower carbon future,” the spokesperson added.