The Leader of the Opposition, Kemi Badenoch, has launched a new campaign in an attempt to seize control of the political narrative about energy security. In a film on the Conservative Party YouTube channel Mrs Badenoch says: “its time for us to drill our own oil and gas in the north sea so I’m calling on the government to lift the ban on new licences, to scrap the windfall tax that is discouraging companies to invest and even allow them to invest abroad with UK export finance”.

In the middle of a war in Iran that has sent global energy prices through the roof, is this strategy the solution? Setting aside the fact that prospecting for oil and constructing drilling platforms takes years, and ignoring the impact of fossil fuels on climate change, the first question one might ask is: how much oil and gas is there in the North Sea? I’ve commented elsewhere on gas reserves, so in this post I will focus on oil.

Rosebank

The on/off status of the Rosebank oil field has been something of a focus for conflict in the UK between environmental campaigners and opponents of Net Zero. It is the largest undeveloped oil field in UK territorial waters in the North Sea. In 2023 the UK Government approved development of Rosebank by a consortium including Equinor (40%), Suncor Energy (40%) and Ithaca Energy (20%). Suncor’s UK subsidiary has subsequently been bought by Equinor, which now owns 80% of the Rosebank field.

Equinor’s plan for development of Rosebank involved the use of floating production storage and offloading vessels like the one pictured here. From Equinor’s web page.

The history of Rosebank provides a window into the complexities of developing North Sea oil and gas resources: licences for exploration were first issued in 2001, and a test well drilled in 2004 confirmed that oil was present. The sea bed above Rosebank is 1100 m below sea level, and the exploratory well was drilled to a depth of 2743 m. Moreover, in this region of the North Sea environmental conditions are very challenging – waves may be 30 m tall. Equinor estimates that the cost of recovering 245 million barrels in Phase 1 of the Rosebank development will be just shy of $10 billion, meaning that an oil price of $40 per barrel is required just to break even.

According to Equinor, the total recoverable reserves of oil in the Rosebank field are of the order of 300 million barrels of oil equivalent (boe). What does that mean? Only about 20% of oil produced in the North sea returns to the UK, because oil is sold in an international market. According to the International Energy Agency, the UK consumed 2 146 689 TJ of oil in 2024, equivalent to 366 million barrels. Thus, the total benefit to the UK of the oil produced from Rosebank will be equivalent to about 2 months’ supply.

How much oil is there in the North Sea?

Of course, while Rosebank is the largest undeveloped field in the regions of the North Sea under UK jurisdiction, it is just one of many fields. According to the North Sea Transition Authority (NSTA), the total amount of oil and gas extracted up to the end of 2024 from UK territorial waters in the North Sea was equivalent to 47.7 barrels of oil equivalent (boe). The UK had proven and probable oil and gas reserves at 2.9 billion boe at the end of 2024. About 70% of these were estimated to be oil. Thus, the proven and probable reserves of oil in the North Sea are equivalent to about five and a half years’ oil consumption in the UK – or just over 1 year given that only 20% of oil returns to the UK.

If we include contingent reserves (oil and gas estimated to be recoverable from known deposits, but not ready for commercial development, although much of this resource is in mature developed areas, with some under consideration for development) then a further 6.2 billion boe is added to the total. This still leaves us with enough oil for three and a quarter years at the current export rate of 80%.

Prospective leads in mapped areas amount to a further 4.6 billion boe, bringing the total to five and a quarter years at current rates of oil usage. The NSTA says “this is supplemented by an additional mean prospective resource of 11.2 billion boe estimated to reside in plays outside of mapped leads and prospects.” These are speculative reserves. Nevertheless, if we add them to our total, the amount of oil and gas in the North Sea could be as great as 24.9 bn boe, equivalent to 9.5 years of UK consumption if the current export rate of 80% is maintained. If all oil resources in the North Sea were taken into public ownership, and producers were required to act in the interests of the UK alone, then there is sufficient oil to provide for the UK’s needs for 48 years. However, the cost of this would be so immense that it would make any costs associated with the transition to net zero seem trifling, and nobody is proposing this – least of all the Conservative Party, whose leader in 1979, Margaret Thatcher, began the process of divesting state control of the North Sea.

Managed Decline

The NSTA was established by the previous Conservative administration to manage the exploitation of the North Sea in the national interest during the transition to renewable energy. There is unquestionably an argument for considering the resources in the North Sea during the UK’s transition to Net Zero. Ed Milliband has maintained this policy. He has not – as is claimed by those on the right – “banned” the exploitation of the North Sea and neither has he capitulated to big oil (as is claimed by many on the left). Rather, he has recognised that if the UK continues to burn some fossil fuels (currently it burns a lot of fossil fuels) it is better that they be sourced locally, with concomitant reductions in environmental impact.

This morning on Sky News, David Whitehouse, the chair of OEUK, the trade body that represents the UK offshore energy industries, emphasised the transitional nature of North Sea fossil fuel production, en route to a situation where most of our energy comes from renewables. He estimates that the North Sea could provide up to half the gas the UK needs for the next 25 years while it makes the transition to renewable energy generation. In truth, the industry appears to have accepted more easily than many politicians the argument that the future must be greener. In addition to advocating for the oil and gas industries, OEUK’s members already include producers of offshore wind; the world is changing.

In searching for OEUK, I Googled UK Oil and Gas, and arrived at the website of UKOG, a company run by a group of petroleum engineers. Its web site explains that they no longer have anything to do with petroleum, being focussed instead on developing hydrogen storage in salt caverns in Devon and East Yorkshire in order “to remove the current necessity of using natural gas to fill the intermittency gap…[and] slash the UK’s current £1billion annual spend on wind turbine curtailment.” New technology, including investment in batteries, promises to hasten our transition away from gas.

Conclusions

The war in Iran has created an oil price spike. It is right that the UK government considers how to insulate the nation from the effects of further future shocks. One response is to double down on fossil fuel production, but with it, to make dependence on fossil fuels – the price of which is set on international markets – more deeply entrenched. The alternative approach is to press for a faster transition to renewable energy. The campaign to get Britain drilling again may tap into deep-seated concerns about the high cost and security of renewable energy sources. However, as the above analysis indicates, there is little hard evidence that doing so will create long-term stability. As long as we continue to burn fossil fuels then it may make sense to better-utilise the resources of the North Sea. However, seeing this as anything other than a transitional arrangement would be economically foolish.