No new North Sea oil wells for first time since 1960s

No new oil wells are to be drilled in the British North Sea this year for the first time since 1964 as Labour’s crackdown on profits and exploration hammers the sector.

A survey of offshore operators has found that zero exploratory wells – the vital first stage of discovering new resources – have been drilled so far in 2025, with no plans for the final two months of the year.

By contrast Norway, whose geology is similar and whose government takes a very positive approach to oil and gas, has seen 30 new exploration wells drilled so far in 2025, with up to nine more expected before year end.

The collapse of exploration in British waters comes in response to a windfall tax on oil and gas profits, which Labour raised to 78pc, and a ban by Ed Miliband on licences for exploratory drilling in new areas.

Exploratory drilling is still allowed in areas licensed before the ban, but industry say the threat of a future raid by government means few are willing to risk investing in new developments.

This year is now on track to be the first in the industry’s history when no new wells are drilled.

The first offshore wells were drilled after the UK Continental Shelf Act in 1964, with the first commercial gas field discovered the following year by BP. The first commercial oil field was discovered in 1969 by Amoco.

The research, carried out by analysts at Westwood Global Energy, comes amid rising political tension over the future of North Sea oil and gas.

Mr Miliband, the Energy Secretary, is due to publish a revised North Sea strategy before the Budget, aimed at restarting some drilling. Rachel Reeves separately is considering ending the windfall levy early.

Westwood’s findings suggest any changes may come too late, with the UK oil and gas industry in rapid decline.

Alyson Harding, at Westwood Global Energy, said: “Our dataset shows that in 2025 to date, oil and gas companies in the UK have not initiated the drilling of any offshore exploration wells.

“This is the first such year since 1964 when the first offshore exploration well was spudded. Investor sentiment … is at an all-time low, due to the current tax regime and uncertainties around government policies and regulation.”

Most UK reservoirs only last for a relatively short time before becoming depleted, so constantly finding and drilling new fields is essential to maintain production.

The slowdown in drilling is one reason that last year the UK had to import 43 million tonnes of crude oil plus another 31 million tonnes of refined oils such as petrol, diesel and jet fuel.

The UK also consumed about 72 billion cubic metres (bcm) of gas, but was only able to produce about 29bcm in its own waters, with the rest coming largely from Norway and the US.

“The Government has taken an exceptionally hostile approach to our sector, at the expense of UK workers, communities, tax take and energy security,” said Robin Allan, chairman of the Association of British Independent Exploration Companies (Brindex).

“With the total collapse of exploration drilling, British homes, factories and power stations are being fuelled with imported oil and gas instead of the abundant resources under our shores, an example of what not to do to demonstrate ‘global leadership’.”

The British North Sea is still estimated to contain reserves of up to 24 billion barrels of oil and gas. There are about 283 active oil and gas fields in the North Sea, but about 180 will have ceased production by 2030.

Claire Coutinho, the shadow energy secretary, said: “The blame for this collapse lays squarely at Ed Miliband’s door. He has chosen to shut down the North Sea while over the border in Norway they are making new finds in the exact same basin – creating jobs, investment, and tax revenue that we’re missing out on in Britain.

“Making ourselves more dependent on foreign imports while refusing to drill our own resources will be remembered as the biggest act of economic self-harm in a generation.”

David Whitehouse, chief executive of Offshore Energies UK, the industry trade body, said: “It is government policy, not North Sea geology, that is prematurely driving the decline of UK oil and gas production. It doesn’t have to be this way.

“We’re asking the Chancellor to use the upcoming Budget to reform the Energy Profits Levy in 2026, a decision that will determine whether we keep investment and jobs here or lose them overseas.”

A spokesman for the Department for Energy Security and Net Zero said: “Oil and gas production will be with us for decades to come, and we are working with industry to manage our existing fields for the entirety of their lifespan.”

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