Offshore Energies UK’s 2025 Economic Report shows that key policy reform can herald a new chapter for the UK’s North Sea energy industry which has powered the home nations for more than half a century.
The report sets out a pathway to secure thousands of high-quality jobs, fire economic growth and achieve government Net Zero and Clean Power 2030 goals.
Its comprehensive analysis provides an authoritative insight into the changing industry landscape, and a unique overview of the trends and opportunities which can transform the UK’s industrial strategy.
It shows that the UK Continental Shelf offers the opportunity to double output and supply at least half of domestic oil and gas demand between now and 2050, but current government policy is stifling production.
Energy imports have now reached a new record of almost 44% of national needs, the report shows. The impact on prices, jobs and greenhouse gas emissions is damaging our economic prospects.
A pragmatic outcome to consultation on oil and gas licences and reform to the energy profits levy (EPL) on oil and gas production in UK waters, alongside an acceleration of renewables, can unlock the investment confidence, supply chains and skills needed to build a secure and diverse energy mix fit for future, the report says.
Other key report findings:
- The EPL has delivered less than half the expected tax revenue
- UK energy imports will remain high without urgent action
- UK low-carbon and renewable power capacity is expanding
- Changes to wind energy auction arrangements are needed to bring down energy price
- Carbon capture and storage offers a commercial opportunity for UK
- Review of energy market prices can bring stability and renew investor confidence
- Global energy efficiency is improving.
OEUK CEO David Whitehouse comments:
'The North Sea has been the powerhouse of the UK’s industrial success and prosperity. The wealth from its output has helped to transform living standards for millions of people for more than half a century.
'With the right fiscal and economic policies it can continue to power us into a new era of economic success.
'Policymakers have the power and the responsibility to make this happen. We are still waiting for the conclusions of government consultations on oil and gas licencing, taxation and industrial policies plus the seventh allocation round (AR7) for renewable energy projects
'Our report shows there is no time to lose. As many as 1,000 UK oil and gas jobs a month being lost – a trend set to continue until at least 2030 and we are seeing a growing new phenomenon of record-breaking energy imports.
'Urgent and pragmatic reform is needed to give UK-based firms, workers and their communities a fighting chance to build the nation’s industrial future and shield households from the volatility of relying on imports. Stable homegrown energy means more high value UK jobs and more predictable bills.
'With sensible policy reform we could produce half of the oil and gas we need right here at home as we scale up renewables. This is not just about industry, it’s about making sure families have affordable, reliable energy through the 2030s and beyond.
'Oil price is now back to pre-Ukraine invasion levels and the Energy Profits Levy is a windfall tax in name only. It’s stifling investment and will produce less than half the revenue the government hoped for. Meanwhile countries like Norway are leaping ahead with a different approach to taxing and licensing responsible oil and gas production alongside scaling up renewables.
'Replacement of the levy with an appropriate price mechanism can help attract investment in more than 2 billion barrels of oil and gas across the UK Continental Shelf (UKCS) and add £150 billion of value to the whole UK economy.'
Source: OEUK
