The UK risks accelerating the decline of the oil and gas industry despite overwhelming industry belief that the basin could still have a long-term future, a report has warned.
The paper by Aberdeen and Grampian Chamber of Commerce found 93% of the businesses it surveyed agreed there is still a future for the North Sea if the right economic conditions are created.
The 43rd Energy Transition report said confidence in the fossil fuel industry is weak due to financial instability, planning delays, transmission charging and slow project consenting, rather than a lack of opportunity or capability in the sector.
It said businesses had repeatedly warned that investment was going abroad due to the country’s poor economic and regulatory policies.
Some 67% of respondents believed planning decisions about important onshore grid infrastructure should be made by the Scottish Government, rather than local authorities.
And 89% support new licences and consents where operators can demonstrate lower emissions than imported alternatives and deliver greater UK economic value.
The report warns of a “growing transition gap”, creating infrastructure delays and uncertainty around government policy.
It made a number of recommendations, including giving consent to the Jackdaw and Rosebank oil fields, replacing the Energy Profits Levy with an oil and gas price mechanism, and quicker planning consent.
Aberdeen and Grampian Chamber of Commerce said the findings showed the urgent need for a more competitive and stable policy environment if the UK is to retain the workforce and industrial capability required to deliver both energy security and net zero.
Chief executive Russell Borthwick said: “For several years now, the dominant political narrative has increasingly suggested that the future of the North Sea is already decided. This report tells a very different story.
“The overwhelming majority of businesses operating across the energy sector still believe there is a future for the basin if the UK creates the right fiscal and regulatory conditions to support it.
“What companies are questioning is not the capability of the North Sea, but whether the UK is still competitive enough to attract the investment required to deliver that future.”
Mr Borthwick said the North Sea remained “one of the UK’s greatest industrial assets” and said the same workforce that built the sector over the last five decades would also be “critical to delivering offshore wind, carbon capture, electrification and wider transition infrastructure”.
He said: “But investment follows stability, and right now too many businesses believe the UK is losing ground to international competitors offering clearer policy, faster consenting and more predictable long-term conditions.
“The message from industry is becoming increasingly clear – you cannot deliver energy security, economic growth and the energy transition while simultaneously hollowing out the industrial base required to achieve all three.”
A spokesperson for the Department for Energy Security and Net Zero said: “Oil and gas production will be with us for decades to come, and we will manage existing fields for the entirety of their lifespan – while actively scaling up clean energy industries in the North Sea.
“Our ambitious plans will make the North Sea a clean energy powerhouse and support up to 40,000 new jobs in Scotland by 2030.”
A Scottish Government spokesperson said: “Decisions on consenting for offshore oil and gas projects, as well as those on licensing and the associated fiscal regime, are matters that are currently reserved to the UK Government.
“We continue to call on the UK Government to approach decisions for North Sea oil and gas projects on a rigorously evidence-led, case-by-case basis, with climate compatibility and energy security key considerations.”
