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\t\tThe Starmer government banned new North Sea drilling licences\t<\/p>\n\t\t\tThursday 29 October 2026 9:07 am\n\t\t\t<\/p>\n
\t\tThe Starmer government banned new North Sea drilling licences\t<\/p>\n
John Healey\u2019s Budget has assumed the government will approve drilling projects that produce more than a billion barrels of oil and gas, meaning ministers will face a hole in the public finances if they fail to green-light new North Sea extraction.<\/p>\n
In its scorecard<\/a> for the Chancellor\u2019s maiden fiscal event, the Office for Budget Responsibility accounted for a boost in tax receipts from the \u201cdevelopment of new fields\u201d that not only include the controversial Rosebank oil field but also other \u201cfuture discoveries\u201d.<\/p>\n The fiscal watchdog used North Sea Transition Authority (NSTA) estimates that assume the government will green light the extraction of all the North Sea\u2019s so-called \u2018prospective resources\u2019 \u2013 the regulator\u2019s informed guess of untapped reserves under current licences based on input from producers.<\/p>\n Any approvals would not be in breach of the government\u2019s 2024 manifesto promise to ban new drilling licences in the North Sea. But they could herald a further softening of its stance to the UK\u2019s energy reserves after recent approval of Jackdaw<\/a> and potential sanctioning of the larger Rosebank project.<\/p>\n The two major oil and gas fields had been held up in a lengthy court battle for several years, before energy secretary Miatta Fahnbulleh greenlit Jackdaw \u2013 the less controversial of the two sites \u2013 last week. The minister said the project would \u201csupport the country\u2019s energy security with homegrown gas\u201d.<\/p>\n \t\t\t\tSUBSCRIBE HERE<\/a><\/p>\n \t\tBurnham vows \u2018pragmatic\u2019 North Sea<\/p>\n A decision on Rosebank, which is more contentious as it consists almost entirely of oil, is now also on her desk, but has not been approved despite the Treasury costing for it in the Budget. Both projects were subject to a lengthy consultation that both Fahnulleh and Andy Burnham have branded \u201cquasi-judicial\u201d.<\/a><\/p>\n City AM understands that energy companies seeking to tap into new discoveries would have to go through similar hurdles to those navigated by Adura \u2013 the owner of Rosebank and Jackdaw \u2013 to get government and regulator approval.<\/p>\n According to the NSTA\u2019s latest estimates, there are roughly 1.2bn barrels of oil and gas equivalent that fall under its definition of prospective resources, meaning the OBR is accounting for a major acceleration in drilling. <\/p>\n The fiscal watchdog said it anticipated oil and gas production to slow at a rate of roughly 10 per cent a year between 2027 and 2031, assuming the development of new fields. But it warned the annual pace of decline would fall to as much as 14 per cent were there to be no production from licensed new fields. <\/p>\n The fact OBR officials priced in the extraction means the government could face a multibillion-pound hole in the public finances should it fail to approve new fields at the rate the watchdog expects.<\/p>\n Many projects have been included in previous forecasts, some of which were not approved, a person familliar with the Budget process said, adding that projects inclusion in the forecast does not necessarily whether or not they will be given the go-ahead by regulators.<\/p>\n A Treasury spokesperson said: \u201cThe OBR makes assumptions about future North Sea production when forecasting tax revenues, and Rosebank has been included in government forecasts since at least 2019. This is entirely separate from the energy secretary\u2019s independent decision on the project, which will be made through the quasi-judicial process, taking into account all relevant factors in the case.\u201d<\/p>\n \t\t\t\t\tRead more<\/p>\n