Oil and gas production in the North Sea has reached its lowest level since the mid-1970s, with the future of the region at stake.
Energy companies extracted about 1.26 million barrels of oil equivalent – the industry’s preferred measure – per day in 2023, according to estimates by the North Sea Transition Authority (NSTA).
This is a far cry from the peak of 4.5 million barrels per day in 1999.
The future of energy production in the North Sea is in question after Labor said it would stop granting new drilling licenses to oil and gas companies if it wins the next election.
In return, Prime Minister Rishi Sunak pledged that the Conservatives would grant new licenses every year. He insists that the North Sea is crucial to the country’s energy security.
The North Sea is known as a mature basin, and much of the oil and gas has already been extracted, so new drilling is crucial if production is to continue.
Separate figures show that investment in the region rose slightly in 2023 after projects including a major field called Rosebank were given the green light.
But Harbor Energy – the North Sea’s largest producer – and other companies said an unexpected tax imposed last year made it a less attractive place to invest overall.
Harbor said she will focus more on her work abroad.
The government imposed an additional tax on energy companies after their profits rose significantly in the wake of the Russian invasion of Ukraine. Oil and gas prices have since fallen to pre-war levels.
Stuart Payne, chief executive of the NSTA, said: “The North Sea has everything you could want in terms of energy and is the jewel in the crown of the UK energy system. Estimated expenditure between 2022 and 2030 is around £200 billion.
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However, campaigners said the production figures prove the North Sea is dwindling as an energy source.
Tessa Khan, chief executive of Uplift, said the belief that more drilling in the North Sea would boost energy security was “pure fantasy”.
“There is no question that the North Sea basin is in decline, and it is a matter of geology,” she said.
“As the data makes abundantly clear, there is simply not enough gas left to make any kind of impact on UK demand.”
The government is also encouraging green industries such as carbon capture to be established in the North Sea. This involves pumping emissions into caverns left by previous oil and gas extraction operations to get them out of the atmosphere.
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