Written evidence submitted by BRINDEX (MAN0043)

The Association of British Independent Exploration Companies (BRINDEX) is the trade association for UK independent oil and gas companies. BRINDEX members represent the majority of UK oil and gas production, the majority of potential future investment in the UKCS and the majority of UK CCS licences.

Summary position statement and key points

Government policy is causing an accelerated decline of oil and gas production from the United Kingdom Continental Shelf (UKCS), which is worsening our energy security, forcing job losses in communities around the country and increasing the carbon emissions associated with our gas supply. Despite the recognised need for oil and gas out to 2050, Government policy is weighted in favour of oil and gas imports over domestic production, contrary to the national interest.

In the transition to a net zero economy by 2050, it is important that there is a baseline of agreed known facts upon which an informed debate can be based upon. These are as follows:

1. There is recognised oil and gas demand out to 2050 and beyond under all net zero compliant scenarios.
2. The transition and the need for investment in new energy sources does not mean oil and gas investment is not needed, it is not an ‘either or’ decision.
3. UK oil and gas production offers clear economic, environmental, geopolitical and social advantages over imported oil and gas.
4. Under a business-as-usual scenario, natural gas import dependency will reach up to 80% by 2030.
5. As the UK increases its defence spending, energy security is critical. Domestic gas production is security of supply, reducing the UK’s reliance on more volatile imports,
6. Government policy over the last 4 years has increased the acceleration of output decline from the UKCS.
7. ‘Accelerated decline’ in the UKCS is not inevitable, given the proven reserves, contingent resources and prospective resources in the basin. An uptick in production is achievable and desirable in the current geopolitical environment.
8. Most of UK gas demand is not for power but for heat. Developing windfarms in the North Sea will not address the fact that 85% of UK homes are heated with gas and that many industries need gaseous fuels for high grade heat. There are growth and societal rewards for closing the gap between UK oil and gas demand compared to UK oil and gas production.
9. Workers in the oil and gas industry are critical for national security, as was recognised during the Covid-19 Pandemic.
10. The UKCS is a world class resource for CCUS deployment. It is important that the end users for gas which will be retrofitted or built anew (power stations and factories) use UK sourced gas.

The fundamental premise and tone of the consultation is a presumption against further oil and gas. BRINDEX and its members reject this premise and will continue to make the case that the presumption should be weighted in favour of maximising the economic recovery of oil and gas in the UK by maintaining and growing production in existing areas and encouraging new development and production. As long as the UK is a net importer of oil and gas there is no case to be reliant on imports when we have resources of our own. We should only import what we cannot produce ourselves.

Government is elected to act in the national interest and should at the very least provide a level playing field for UK production against imports. Growth cannot occur if government policy is biased against its own domestic production in favour of higher imports.

Government should

1. Adopt a policy which maximises oil and gas employment and low carbon employment in the UKCS, securing 30,000 more jobs in each year of the remainder of this parliament.
2. The fiscal environment is changed to enable UK oil and gas to compete on a level playing field, maintaining and creating jobs and tax revenue, whilst also reducing UK energy supply emissions.
3. Introduce an exploration policy which maximises new oil and gas production

Consultation questions

1. What should be the underlying principle of the UK’s strategic policy for keeping the oil and gas sector competitive during the energy transition?

The underlying principle of UK Government policy to keep the UK oil and gas sector competitive should be that producing oil and gas in the UK offers benefits that far outweigh a reliance on oil and gas imports.

The UK Government should:

1. Retain the principle of Maximising Economic Recovery (MER) as is enshrined in law in the Petroleum Act 1998 (as amended by the Infrastructure Act 2015). 
2. Remove the self-defeating Energy Profits Levy (EPL) and return the tax level back to 40%. The failure to remove the EPL in full will ensure capital is deployed overseas rather than in the UK and will therefore also result in lower tax revenue due to lower levels of production.
3. Encourage the further exploration of oil and gas in mapped and unmapped regions of the UKCS to maximise the economic recovery of oil and gas across the reserves and resources remaining.

At present, UK Government policy is making oil and gas production in the UK uncompetitive, with the Digest of UK Energy Statistics (DUKES) showing that UK energy production in 2024 hit a record low. Since 2019, hostile policies introduced by the Conservative Party and then worsened by the Labour Party have resulted in a 42% reduction in UK oil production and a 21% reduction in gas production.

A priority of this government is the delivery of ‘Clean Power 2030’, which aims to deliver 95% clean power generation in GB by 2030, with the remaining 5% being unabated gas. Even if this policy goal is achieved, which under current levels of development looks unlikely, UK natural gas import dependency will increase from 50% in 2025 to 70% by 2030. The volume of gas imported in 2030 will also be higher than today under NESO’s central forecast.

UK Government policy as exists is ensuring that the UK oil and gas sector will not remain competitive throughout the transition and will ensure that a greater share of UK oil and gas demand comes from overseas rather than from this country.

To be clear, the ‘Transitional Energy Certificates’ are too restrictive and will not play a meaningful role in extending the life of UKCS fields and infrastructure.

2. How can the UK continue to make best use of its oil and gas infrastructure as an asset while delivering the transition?

A policy of maximising the economic recovery of oil and gas from the UKCS will ensure that oil and gas infrastructure is utilised for the entirety of its economic life, rather than being decommissioned prematurely.

Government representatives have made claims that as the UK is a mature and declining basin, there is not much in terms of reserves remaining. This is incorrect.

Analysis by consultancy Baringa, ‘Should the UK Change its UKCS Investment Policy?’ has shown that under the existing policy environment, UK natural gas production out to 2050 will be 224 billion cubic metres. Under a supportive policy environment, UK natural gas production out to 2050 would more than double to 461 billion cubic metres and under a best-case scenario production scenario, UK natural gas output out to 2050 would more than treble to 688 billion cubic metres.

The increasing of UK natural gas production is not in conflict with the UK’s net zero target or Clean Power 2030, given the majority of natural gas demand is outside of the electricity sector.

We disagree with the Government position that the policy position on oil and gas will set the UK as a global leader in tackling climate change. The UK cannot claim a climate leadership position simply by exporting its emissions elsewhere. Indeed, data shows that emissions from an increased reliance on imported sources will increase the UK’s energy supply emissions. We fail to see how that outcome can be claimed to be one of climate leadership. British homes and businesses will continue to use oil and gas out to 2050 and beyond. It will just not be British oil and gas.

It is hard to understand what the logic is to this position beyond an ideological one where the conclusion and hostility to oil and gas drives the evidence. Government is uniquely damaging its oil and gas production sector. The growing gap between forecast demand for oil and gas and production, increased by hostile government policy; itself increasing our dependence on imported resources is unlikely to be seen as an exemplar for the energy transition; rather how not to go about it.

This is perhaps best demonstrated by the fact that the UK is the only petroleum producing nation in the North Sea not pursuing new development. On the 23rd of April 2025, the Netherlands Climate and Green Growth minister signed the ‘Sector Agreement on Gas Extraction in the Energy Transition’. This agreement will maximise gas production from the Dutch North Sea and reduce import dependency. The Dutch North Sea is very mature (more mature than the UKCS), and despite this the Dutch government have decided to be more directly involved in facilitating and supporting gas extraction in their national interest. Sophie Hermans, the Netherlands' Minister for Climate Policy and Green Growth, emphasised the importance of energy independence, stating, “In an increasingly unstable world, it is crucial that we take responsibility for our own energy supply. This agreement helps us move forward with less reliance on other countries, lower emissions, and a future-focused approach."

It is also the case with Norway. The Norwegian government has a pragmatic policy of support for its domestic oil and gas industry as well as support for its low carbon sector. Norway has a 97% clean power grid and is one of the largest producers of oil and gas per capita in the world. Norway is able to provide oil and gas to its European neighbours, which has helped create one of the world’s largest sovereign wealth funds. Norway is a model of fiscal stability and a supportive regime, which is the very opposite of the UK which has had multiple tax hikes as well as legislative and regulatory changes.

There is a great opportunity for the UK to maximise the economic recovery of oil and gas from the UKCS and soften the rate of decline.

3. How can the UK ensure that critical services that rely on a reliable fuel supply chain (from hospitals, to generators, to freight logistics, to food supply) can transition to low carbon alternatives without any disruption?

In the transition to a low carbon economy, there will be a continued reliance on oil and gas. The share of oil and gas in the economy wide energy demand as of 2024 is 74%, and by 2050 this is expected to be 25%.

Maximising the production of oil and gas from the UK will ensure that the UK can rely on the energy rather than an increasing reliance on imports. For example, there are now 48[1] countries that import LNG which the UK must compete with in order to secure these supplies and there are fewer than 800 LNG tankers (each with a capacity of around 1 TWh) capable of delivering LNG to end users from a limited number of LNG exporting nations. In order to secure these supplies, the UK will have to out-bid other nations, meaning a reliance on LNG imports will lock the UK into a high price environment during periods of global high demand for gas.

4. What does the Government need to do to ensure that the transition away from oil and gas does not simply de-industrialise areas and damage the communities that currently benefit from the fossil fuel industry?

Existing government policy is seeing the deindustrialisation of parts of the UK and is damaging the communities that have benefited from oil and gas development.

Job losses are happening now. It is not theoretical. Workers in the oil and gas sector are skilled, well paid, disciplined and hard working. Due to government policy, companies are not investing in the UK, as is evidence by the fact that 2025 was a record low for UK oil and gas exploration with no new exploration wells drilled for the first time since production began in the basin.

The government is creating a cliff edge between the oil and gas industry and low carbon growth sectors. As the GMB have noted, change needs to be done with workers, not to them. By encouraging the continued production of oil and gas production from the UKCS the UK can maximise the number of workers in the oil and gas sector while also expanding opportunities in sectors such as offshore wind and CCUS. Based on analysis from Stifel, government policy could see 100,000 job losses in the oil and gas sector by 2030, posing an unacceptable risk to communities across the UK. Based on the analysis from Robert Gordon University (RGU), the government is opting for an upper estimate in the offshore workforce (excluding oil and gas), and a lower estimate in the oil and gas worker value. By opting for a strategy in both sectors of the North Sea workforce which maximises RGU’s upper estimates in both sectors of the North Sea workforce, the UK would have around 30,000 more men and women working in North Sea every year across this parliament.

Further analysis by Robert Gordon University has forecast that under existing government policy, 1000 workers in the UK oil and gas sector will continue to their job every month. The responsibility for those job losses are the governments.

Government rhetoric in response to job losses has included claims that the decision by UK oil and gas companies not to invest in the basin is simply a ‘commercial decision’, failing to realise that it is the government’s hostile policy that drives business decisions. It is also of relevance to include that the Prime Minister was unable to correctly describe the functionality of the Energy Profits Levy and the Chancellor claimed that she did not believe the job losses figures.

5. How should the UK manage a declining domestic market in gas, including how the gas infrastructure can be partially, or completely, decommissioned without putting the burden on a shrinking number of customers?

BRINDEX and its members believe there is a long-term role for gas in the transition to Net Zero in 2050. Gas is an essential fuel for homes, dispatchable power generation and industry and will continue to be so out to 2050. The National Energy System Operator have said that ‘natural gas, biomethane and hydrogen co-exist in our pathways to 2050’.  The question is how much of that natural gas required will be produced in the UK out to 2050 and beyond.

6. What should the Government be doing to ensure the supply chains for the oil and gas sector are sustained as North Sea output declines and they transition to supporting the renewables sector?

Every aspect of the supply chain will be impacted negatively by government policy on the future of the North Sea. Sectors which will be most at risk include well head manufacturers and rig equipment manufacturers.

A transition must mean that the supply chain is enabled to make sufficient returns in order to fund and invest in retraining and plan for transition readiness. Prematurely accelerating oil and gas production from the UK reduces the ability for the supply chain to prepare for the transition and will inevitably result in relocation overseas.

January 2026

APPENDIX: SUMMARY OF DIGEST OF UK ENERGY STATISTICS 2025

• In 2024, UK energy production hit a record low.
• UK energy production has declined by 67% since 2000.
• UK energy production has declined by 26% since 2019 (oil production is down 42% since 2019 and gas production is down 21% since 2019)
• UK natural gas production reached the lowest level since 1973.
• More than 90% of UK energy imports were oil and gas
• 44% of UK energy production was imported in 2024 (including 49% of UK gas demand and 52% of UK oil demand)
• From 2023 to 2024, oil production fell by 9% and gas production fell by 10%.
• The US accounted for around 40% of UK oil imports
• One quarter of UK gas imports came as LNG – with the US accounting for 68% of UK LNG supply
• UK energy demand was 75.2% oil and gas in 2024
• Wind and Solar generation hit a new record high of 5.2% of UK energy demand, lower than nuclear at 5.4%. The UK uses 15 times as much energy from oil and gas as we generate from wind and solar.
• Over the last five years, in real terms, industrial gas prices have increased by 108% and industrial electricity prices have risen by 80%
• UK refinery production is down 60% since 2000.
• The UK imported 77 TWh of US LNG in 2024 – 30% of UK households were heated using American gas in 2024.
• Net electricity imports from Europe increased by 40% from 2023 to 2024.
• Since 2000, total UK power generation is down 25%, with fossil fuel use in power generation down 67% and renewable generation increasing by ten fold.
• Despite an 8.1% increase in offshore wind capacity, generation declined by 2.2% due to lower load factors
• The UK produced more energy in the first four months of the year 2000 (96.2 mtoe) than we did in the whole of 2024 (94.8 mtoe).