UK North Sea oil and gas sector faces investment shift as Labour vows drilling ban

Labour has pledged to ban any new licences for oil and gas drilling in the North Sea, a move championed by Energy Secretary Ed Miliband as part of a "clean power mission" to lower energy bills. The policy follows the announcement of the Energy Independence Bill in the recent King’s Speech.

An Energy Transition Report by the Aberdeen & Grampian Chamber of Commerce, reflecting the views of 121 industry organisations, warns that the ban could trigger a brain drain of expertise and shift investment abroad. More than nine in ten companies still see a long‑term future for the North Sea if the government provides suitable fiscal and regulatory frameworks. Industry estimates suggest up to 7.5 billion barrels of recoverable oil, roughly twice official government figures.

The report predicts domestic revenues may be overtaken by overseas markets such as Norway within five years and highlights a shortage of skilled workers needed for the energy transition. Operators also continue to pay a "windfall tax" on profits. Stakeholders argue that limiting drilling will not necessarily reduce consumer bills because global oil and gas prices are set internationally.