The UK stands at a critical juncture in its energy transition, with a new report from Offshore Energies UK (OEUK) advocating for a strategic boost in domestic oil and gas production. The report argues that, with the right investment climate, the UK could meet half of its projected oil and gas demand by 2050 from domestic sources, a significant shift from the current trajectory.
The UK’s Climate Change Committee estimates that the country will need between 13 and 15 billion barrels of oil and gas by mid-century. Yet, current projections indicate that the UK is on track to produce only 4 billion barrels domestically. This gap underscores the urgent need for policy action. OEUK suggests that with supportive government policies, an additional 3 billion barrels could be produced domestically. This would not only reduce dependence on foreign supplies but also secure jobs, bolster the economy by £150bn, and enhance energy security.
The report’s release coincides with the government’s consultation on the future of the North Sea and oil and gas taxation. These policy decisions, alongside the Comprehensive Spending Review and the new Industrial Strategy, will be pivotal for major energy projects, including carbon capture and storage (CCS) initiatives. CCS is crucial for decarbonising heavy industry, and its development could be a game-changer in the UK’s energy landscape.
OEUK’s Chief Executive, David Whitehouse, emphasised the importance of a balanced approach. “The future of the North Sea is in our hands,” he stated. “Our report shows as we work together to accelerate renewables the UK must make the most of its own oil and gas – or choose to increase reliance on imports.” Whitehouse’s remarks highlight the delicate balance the UK must strike between transitioning to renewable energy and maintaining energy security.
The UK’s energy production hit a record low last year, with over 40% of its energy imported. This reliance on foreign supplies is a stark reminder of the need for a robust domestic energy strategy. OEUK’s survey of energy firms revealed that nine out of ten companies are now seeking investment opportunities abroad due to more favourable business environments. This trend underscores the urgency of creating an attractive investment climate in the UK.
While renewables and low-carbon solutions must continue to expand, maintaining a homegrown gas supply is essential for industry and economic stability. With electricity demand set to more than double by 2050, oil and gas will still account for a fifth of the country’s energy mix. OEUK is calling for a balanced approach—accelerating offshore wind, hydrogen, and CCS, while ensuring the UK maximises its domestic oil and gas resources. This strategy aims to support energy security, job creation, and long-term economic growth.
The report’s findings spark a crucial debate on the UK’s energy future. As the country navigates the complexities of the energy transition, it must consider the role of domestic oil and gas production in securing a stable and prosperous energy landscape. The decisions made today will shape the UK’s energy sector for decades to come, and the stakes are high. The UK must act decisively to ensure a secure, sustainable, and economically viable energy future.
