BP Set to Quit UK North Sea Oil in Pivotal Moment for PM Burnham

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessBP Set to Quit UK North Sea Oil in Pivotal Moment for PM BurnhamBP Plc’s decision to put its UK North Sea business up for sale marks a critical moment for the country’s dwindling oil and gas industry as new Prime Minister Andy Burnham weighs whether to allow new drilling.Author of the article:Joe Mayes, Mitchell Ferman and Ellen Milligan You can save this article by registering for free here. Or sign-in if you have an account.Protesters against the Rosebank field outside of the Court of Session in Edinburgh in November 2024. Photo by Jeff J Mitchell /Source: Getty Images Europe(Bloomberg) — BP Plc’s decision to put its UK North Sea business up for sale marks a critical moment for the country’s dwindling oil and gas industry as new Prime Minister Andy Burnham weighs whether to allow new drilling.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAs well as being one of the largest British companies, London-based BP is the only remaining oil major to have a standalone UK North Sea business. The sale of its assets, which could be worth about $2 billion, is both politically symbolic and financially significant for the future of the area.Burnham, who succeeded Keir Starmer as UK premier last week, has hinted at a friendlier approach to new fossil fuel projects in waters off the coast of Scotland. It’s a contentious subject that risks angering environmentally-minded voters on one side and labor unions on the other — both of which are core constituencies for the prime minister’s party. Opposition parties argue that new drilling would help reduce the cost of living. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againBP’s announcement follows a period of tension between North Sea producers and successive British governments. Since 2022, when the ruling Conservative party imposed a windfall tax on offshore oil and gas producers, companies have argued that investing in the area was no longer competitive. When the current Labour government came to power two years ago, it extended this energy profits levy and banned new licenses for exploration in the basin. BP’s move “should be a defining moment for the new prime minister,” said Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, located in the city that is home to the UK oil and gas industry. “This decision is another stark reminder that confidence in the UK continental shelf has been badly shaken after years of policy uncertainty, punitive taxation and mixed messages about the future of the industry.”Investors and energy executives are watching intently to see whether Britain’s new leader will change tack. US President Donald Trump has also been taking a keen interest.In the biggest hint of the approach he’ll take so far, Burnham told Trump in their first call that he’d be “pragmatic” on the issue of drilling for oil and gas. This stance was welcomed by the president, who said the prime minister had “pledged to open up the North Sea.”“There is a resource there,” Burnham told reporters on Thursday, when asked about Trump’s comments. “When people are struggling — you can’t ignore that.”Trump consistently criticized Burnham’s predecessor for failing to back new projects in the North Sea. The president’s decision to upend global oil and gas markets by attacking Iran has also made the question of domestic energy production, and whether it should prioritize renewables or fossil fuels, even more of a political flashpoint.Meanwhile, the spread of wildfires across Europe in recent weeks, including a blaze in Suffolk, east England, has raised the salience of climate change.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.The two biggest imminent decisions for Burnham’s government concern whether to give the go-ahead to the Jackdaw and Rosebank fields, the latter of which is the largest undeveloped oil and gas reservoir in UK waters, with an estimated 300 million to 500 million barrels of oil equivalent. Both are operated by Adura, a joint venture between Shell Plc and Norway’s Equinor ASA.The decisions, which officials argue fall outside Labour’s manifesto commitment to block new drilling because they involve licenses issued years ago under the previous government, are currently out for public consultation. Government officials, speaking on condition of anonymity, expect Burnham eventually to back at least Jackdaw, but continue Starmer’s policy of issuing no new licenses for North Sea oil and gas drilling. “This is one of those ‘moments’ that should serve as a deadly serious wake up call,” Andrew Griffith, shadow business secretary for the opposition Conservative party, said in a statement. “Britain needs to compete — for energy, capital and talent — but the government carries on putting up taxes and piling on red tape.”The major international oil companies that pioneered North Sea drilling sixty years ago have long been saying farewell to the area. Shell and TotalEnergies SE have combined their operations with others to form independent units in the aging offshore basin. Others such as Chevron Corp. and ConocoPhillips already sold their North Sea assets. BP has been shrinking its own presence in the region over the last decade, including the sales of its interest in the Shearwater field to Shell and the Forties pipeline system to Ineos Group Holdings SA. The company still holds a 45% stake in Clair, the largest UK oil field, and produces about 100,000 barrels of oil equivalent a day across five North Sea production hubs. That’s just a sliver of its total global output of about 2.3 million barrels equivalent a day. “The UK has been our home for more than 100 years and will continue to play an important role in our future,” BP CEO Meg O’Neill said in a statement, as she described the North Sea as “integral” to the UK’s energy system. “However, as we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company.”Environmental groups say the government shouldn’t sacrifice the UK’s leadership on carbon emissions reductions by intervening to revive a polluting industry that is reaching the end of its natural life.“If the North Sea really were the savior of jobs, opportunity and energy security that the fossil fuel lobby claims, its biggest beneficiaries wouldn’t be heading for the exit,” Angharad Hopkinson, political campaigner at Greenpeace UK, said in a statement. “Burnham has said he wants to lead a pragmatic government. Pragmatism means facing reality, not clinging to a dying basin while communities, the economy and the climate all demand a more secure future.”Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.