Turuk Oil and Gas

UK government to allow new North Sea oil and gas exploration

Despite the government's promise to reduce carbon emissions, ministers will allow oil drillers to continue exploring the North Sea for new deposits as long as they pass a "climate compatibility" test.

The government has pledged to assist the North Sea oil and gas industry in reducing carbon emissions through a combined investment of up to £16 billion in order to support 40,000 North Sea employment. In exchange, the industry has pledged to decrease carbon emissions by half by the end of the decade. The government stated that its "historic agreement" will facilitate the oil and gas industry's transition to a sustainable energy future.

The government intends to implement a new "climate compatibility checkpoint" to evaluate if each application is "consistent with the United Kingdom's climate change objectives." The checkpoint will utilise the most recent information for the UK's domestic demand for oil and gas, North Sea expected production levels, clean energy availability, and the sector's progress toward its emissions reduction objectives.

The North Sea Transition Deal capitalises on the United Kingdom's global experience in offshore oil and gas production and aims to maximise the benefits of the global transition to clean growth for the UK's oil and gas sector. It seeks to achieve the commitments made in the government's Energy White Paper's oil and gas chapter, and it is closely linked to the Prime Minister's Ten Point Plan.

The North Sea Transition
deal supports continued oil and gas exploration in the North Sea and targets 10% reductions in offshore production emissions by 2025, 25% by 2027, and 50% by 2030, against a 2018 baseline.

Upstream oil and gas operations in the UK accounted for 4% of UK greenhouse gas emissions in 2018. The Deal will reduce greenhouse gas emissions from the UK upstream oil and gas industry through an ambitious production emissions reduction programme. The industry has already responded to the UK's 2050 net zero ambitions by pledging to become a net zero basin by 2050 and setting lofty goals.

Set against a 2018 baseline and subject to joint government and sector actions, the revised early targets of the Deal amount to an absolute decrease in production emissions of 10% in 2025, 25% in 2027, and 50% in 2030 on the way to net-zero emissions by 2050.

The Agreement will aid in the development of knowledge to support growth in the local energy sector and, subsequently, in export growth markets, resulting in the creation of a globally competitive energy supply chain of international renown. The supply chain commitment is centred on assisting in the transformation of the oil and gas supply chain to serve low-carbon energy sectors both at home and overseas.

The government will invest £6.3 million in the Global Underwater Hub and an extra £2 million in the development of the Deal, supporting the industry in taking the lead in achieving the UK's net zero targets.

The industry is committed to decarbonization, and subject to success on the agreed measures, it will take efforts to decrease emissions from oil and gas production by 10% by 2025, 25% by 2027, and 50% by 2030 (all relative to the 2018 baseline), as meaningful steps toward a net zero basin by 2050.