An offshore energy trade body has welcomed the announcement of 27 new oil and gas licences as a “boost for UK energy security” but Scotland’s First Minister has said it is the “wrong move”.
Announcing the licences, the North Sea Transition Authority (NSTA) said they have been awarded in areas prioritised because they have the potential to go into production more quickly than others.
It said the licences in the central and northern North Sea, and west of Shetland, were awarded first to let operators press ahead with their plans to explore and develop oil and gas resources.
Questioned on the new licences, Scotland’s First Minister Humza Yousaf told the PA news agency: “I think it’s the wrong move, particularly given the extreme threat of the climate crisis that we’re facing, and we’re seeing the impacts of in this country, let alone right across the world.
Ensuring that the UK has broad options for energy security is at the heart of our work— Stuart Payne, NSTA chief executive
“I’m a big supporter, of course, of our gas industry and the workers who work in it.
“But I’m equally a supporter of transitioning towards renewables. And I believe that the north east (of Scotland) in particular, could transition from the oil and gas capital of Europe to being the renewables capital, and net-zero capital of Europe.”
The 33rd Oil and Gas Licensing Round was launched in October 2022 with 931 blocks and part-blocks made available for application.
Offshore Energies UK (OEUK), the leading trade body for the sector, said the industry needs the churn of new licences to ensure there is no cliff edge in domestic production.
Chief executive David Whitehouse said: “This announcement is a boost for UK energy security and for the 200,000 people in jobs supported by the offshore energy sector.
“These are the very people we need to deliver reliable supplies of homegrown energy produced in the UK, for the UK.
“We all recognise that our energy system must change, and our industry includes companies that are expanding into renewables while using their expertise to pioneer ever cleaner energy production.
“The reality of the energy transition is that we need both oil and gas and renewables in an integrated system to protect the UK’s energy needs over the coming years.
“Last year, filling the fuel import gap cost the UK £117 billion. That’s a lot of money spent supporting the economic growth of other producing countries.
“With careful management and collaboration, the UK can become the gold standard of energy transitions.”
However, climate activists hit out at the licensing as “backward” and warned that the UK would be “fuelling the climate crisis rather than helping to fix it”.
Philip Evans, climate campaigner for Greenpeace UK, said: “Greenpeace plans to fight these licences in the courtroom, and we’re mobilising voters to prioritise climate at the next election because, frankly, we’re all sick of these backward-facing policies.”
OEUK said there are 284 active oil and gas fields in the North Sea and that by 2030 about 180 of those will have ceased production due to natural decline.
The NSTA said that oil and gas contribute about three quarters of domestic energy needs and official forecasts show that, as the country transitions, they will continue to play a role in the UK’s energy mix for decades to come.
Stuart Payne, NSTA chief executive, said: “Ensuring that the UK has broad options for energy security is at the heart of our work and these licences were awarded in the expectation that the licensees will get down to work immediately.”
The UK Energy Security Secretary, Claire Coutinho, said: “As recognised by the independent Climate Change Committee – we’ll continue to need oil and gas over the coming decades as we deliver net zero.
“It’s common sense to reduce our reliance on foreign imports and use our own supply – it’s better for our economy, the environment and our energy security.
“These new licences are a welcome boost for the UK industry, which already supports around 200,000 jobs and contributes £16 billion to the economy each year – while advancing our transition to low-carbon technologies, on which our future prosperity depends.”
