The tale of two basins: Unleashing our energy potential
A pragmatic approach to homegrown resources ensures economic resilience, lowers environmental impact, and secures highly skilled jobs across the nation.
The offshore energy sector serves as the backbone of our economy, our communities, and our future. For decades, the North Sea has provided the homegrown energy necessary to keep the lights on, heat homes, and power heavy industries. As we build out renewable energy infrastructure, the reality is that oil and gas will remain a critical part of the mix for decades to come.
Maximising our domestic resources is a pragmatic strategy that directly reduces our reliance on volatile global imports, cuts our overall carbon emissions profile, and anchors billions of pounds in economic value within our borders.
The data behind the policy
Examining the latest figures reveals the stark contrast in trajectory between neighbouring nations sharing the same geological basin.
Gas emissions footprint (kgCO2e/boe)
Domestic UK gas produces significantly lower emissions compared to imported LNG via tankers.
Total exploration wells (2025)
2025 marked the first year since 1960 with zero exploration wells in the UK, while Norway completed 33.
Reserves replacement ratio (2019-2024)
The percentage of produced reserves replaced by new discoveries, highlighting Norway's sustainable pipeline.
Discovered resources 2016-2025 (million BOE)
Norway has discovered over seven times more resources than the UK over the past decade.
UK gas supply mix (2020-2024)
Domestic production accounted for 43%, heavily supported by Norwegian pipelines and global LNG imports.
Total GB gas demand forecast (bcm)
Demand is forecast to remain remarkably steady, dropping a mere 0.6% between 2026 and 2035.
The economic and environmental reality
£36bn
Economic contribution
In 2024, the offshore energy industry injected over £36 billion into the national economy.
240k+
Jobs supported
Supporting livelihoods nationwide, with 115,000 jobs directly tied to the oil and gas sector.
10 Days
Storage vulnerability
The nation only holds gas storage capacity for 10 days of demand, leaving infrastructure exposed to supply shocks.
Deep dive: National security and infrastructure
Key infrastructure nodes, such as St Fergus and Teesside, handle up to half of all domestic gas flows. Low domestic throughput risks the premature closure of these vital pipelines and processing terminals. Losing these assets would severely compromise the flexibility and reliability of the energy grid, especially during winter stress events.
Advocating for domestic production is not an argument for increased gas usage; it is a strategy regarding where our necessary gas originates. Maximising domestic extraction cuts carbon profiles, reduces import reliance, and limits exposure to volatile global markets. The primary sources for LNG imports are the USA and Qatar. Securing a high domestic production model successfully avoids 8 to 15 BCM of expensive imports, generating enough lower-carbon British gas to heat millions of homes.
Without continuous investment, production rates fall into unmanaged decline rather than a managed transition that creates long-term value. Westwood Global Energy Group reports that the current lack of investment spans the entire lifecycle, from exploration through to production, putting the entire supply chain at risk of premature cessation.
Learning from Norway: A tale of two basins
On paper, both nations apply a headline tax rate of approximately 78% on energy extraction companies. However, looking beyond the headline figure reveals why the investment experience, and resulting energy security, diverges so dramatically.
Norway
- Stable framework: The core tax system has remained unchanged since 1992, giving operators multi-decade planning confidence.
- Exploration support: Norway offers a massive tax refund system (nearly 72%) on exploration losses, vastly reducing the risk of drilling dry wells.
- Full allowances: Fiscal architecture permits companies to fully deduct capital, exploration, and decommissioning costs against profits.
United Kingdom
- Frequent tinkering: The Energy Profits Levy (EPL) has been introduced, extended, and its rate altered multiple times in rapid succession.
- Slashed allowances: Crucial investment allowances (like the former 29% allowance) have been eradicated under the windfall tax.
- Decommissioning uncertainty: Capped relief excludes decommissioning from EPL deductions, making the management of late-life assets highly unpredictable.
Norway
- Predictable cadence: Norway’s Awards in Predefined Areas (APA) ensures a reliable schedule. The 2025 round saw 57 licenses awarded to 19 companies seamlessly.
- High drilling output: Norway completed 33 exploration wells in 2025, continuing to discover substantial new resources.
United Kingdom
- Drawn-out processes: Licensing rounds are infrequent and sluggish. The 33rd Round took an exhaustive 22 months from launch to award.
- Zero exploration: In 2025, the basin experienced zero exploration wells spudded for the first time since 1960.
Norway
- Record investments: Operators are heavily shifting capital expenditure toward Norwegian assets due to high expected returns and stable oversight.
- Technology focus: Funds are actively directed toward exploration technology and enhancing recovery rates to develop fresh resources.
United Kingdom
- Capital flight: Major operators have announced exits or the cessation of operations due to the highly unstable fiscal regime.
- Cost reduction mode: Investments are primarily limited to late-life asset optimization, efficiency improvements, and early decommissioning planning.
Norway
- Cross-party support: The major political parties have agreed to protect the industry from short-term political cycles.
- Transition funding: Policymakers explicitly position oil and gas revenues as the primary funding mechanism for the energy transition and the sovereign wealth fund.
United Kingdom
- Political football: The fiscal regime changes with administration shifts and immediate budget pressures, deterring long-term capital commitments.
- Polarised debate: The narrative often pits traditional energy directly against renewables, rather than viewing them as an integrated energy solution.
Charting a sustainable path forward
The discrepancy in success across the median line is not dictated by geology. It is entirely determined by how respective governments treat underground resources through policy, regulation, and taxation. By shifting from short-term fiscal tinkering to stable, long-term frameworks, our nation could replicate this success, safeguarding industrial jobs, maintaining crucial tax revenues, and reinforcing energy security for future generations.
