Former BP chief executive backs end to new North Sea licences

A former boss of BP has called for an end to new oil and gas licences in the North Sea in an apparent endorsement of Labour’s election promise.

In an opinion piece for the Financial Times, Lord John Browne said the UK “should call a halt” to new drilling and “reinforce our intention to get to net zero”.

Drilling in existing fields and in licences already awarded should continue, he wrote, but developing the “very limited” remaining resources would not be economic.

“The future of the North Sea, and the jobs and communities it supports, is not just in oil and gas but in the clean technologies that will power our future,” he said.

Lord Browne, who ran BP from 1995 to 2007 and now sits on the House of Lords crossbench, said UK political parties face a key test in the upcoming election on their plans for the green energy transition.

Substance over climate ‘rhetoric’

He said the next UK government can set an example by “putting substance behind some of the empty rhetoric that too often passes for climate policy”.

“Energy security matters but the next government must recognise it does not depend on the UK being self-sufficient,” he said.

© Bloomberg

Achieving this security requires a diverse source of energy supplies and steadily reducing oil and gas imports by developing low-carbon alternatives, he said.

Lord Browne said UK politicians should also invest all revenue from the remaining oil and gas production in accelerating investment in areas like wind, solar, energy storage, carbon capture and green hydrogen.

He also highlighted the need to consider decommissioning of North Sea oil and gas infrastructure, with £20bn needed to tackle projects due within the next 10 years.

While not explicitly backing Labour’s election policies to ban new oil and gas licences, Lord Browne said “both parties” need to take the difficult task of achieving net zero  by 2050 seriously.

“The tough choices we face cannot be left simply to market forces,” he said.

North Sea oil and gas

Lord Browne’s comments come the day after UN secretary-general Antonio Guterres called for a “windfall” tax on the profits of fossil fuel companies.

Labour has promised to ban new oil and gas licences introduce a higher windfall tax on North Sea operators if it wins the next election, amid warnings the policy puts 100,000 industry jobs at risk.

Unions representing offshore workers are campaigning against the policy, while the Aberdeen Grampian Chamber of Commerce has warned firms could exit the North Sea.

Multiple oil and gas operators across the North Sea are already delaying projects due to election uncertainty.

But responding to Lord Browne’s comments, Labour’s shadow energy minister Ed Miliband told the Financial Times that his intervention supports the International Energy Agency and the Climate Change Committee “who make clear that new oil and gas licences are not the right choice for Britain”.

“The only way to boost our energy security, strengthen our economy, protect our climate and ensure long-term, good jobs here in Britain is by managing existing licences while sprinting to develop the clean energy industries of the future,” Mr Miliband said.