Britain urged to follow Norway as it restarts North Sea drilling licences

The Norwegian government previously paused new exploration in frontier regions - Hakon Mosvold Larsen/NTB Scanpix

Britain must follow Norway’s lead and lift an embargo on drilling licences, opposition parties have urged, after the oil-rich nation reopened exploration licences in the North Sea.

The Conservatives and Reform UK said Ed Miliband, the Energy Secretary, should rethink a ban on new oil and gas licences as Norway opens the basin to exploration for the first time since 2021.

Norway became Britain’s primary source of gas last year as UK output shrank in the wake of the windfall tax and a ban on new licences.

The latest move is likely to see Norway sell even more supplies to the UK after its energy minister, Terje Aasland, said new licences would allow it to be “a long-term supplier of oil and gas to Europe”.

Announcing the licencing round – which will cover the northernmost Barents Sea, the Norwegian Sea and the North Sea – Mr Aasland said: “The Norwegian continental shelf will continue to create value and jobs for our country.

“The oil and gas industry is knowledge, expertise and technology intensive. Increased activity in this industry also has positive effects on other industries and parts of our society.

“It means oil and gas are the engine of the Norwegian economy, and I am convinced that the Norwegian continental shelf has a bright future. There are many exciting development projects underway and there is great interest in the licencing rounds. This contributes to new investment opportunities and profitable jobs.”

The decision represents a reversal of the oil-rich nation’s previous policy of pausing new exploration in frontier regions. These will be its first new licences in such locations since 2021.

The Norwegian ministry of energy said it was now consulting with energy companies on which “frontier” areas would be opened for exploration. Under the scheme, companies which already have licensees will be allowed to nominate new exploration areas anywhere on the Norwegian continental shelf – including the North Sea, only excluding areas already in production.

Andrew Griffith, the shadow business secretary, said the Government must follow its Nordic neighbour to boost the economy, bring down bills and create more jobs.

He said: “The UK is missing a massive economic trick with the self-harm of not exploiting our North Sea reserves.

“It’s not as if the economy is growing so fast we don’t need the cheaper energy or jobs that this would bring. We should follow Norway’s lead and relaunch new exploration and drilling projects now.”

Richard Tice, Reform UK’s energy spokesman, said Britain should go further, opening up drilling for shale gas onshore as well as restarting exploration in the North Sea.

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“Not only should we be scrapping net zero, we should be opening up as many oil and gas licences, for exploration and drilling, as possible, both offshore and onshore with shale gas. We should be taking advantage of our energy treasure,” he said.

“It is criminally financially negligent not to do so. We have got hundreds of billions of pounds worth of this energy treasure that this government and the previous Tory administration wanted to leave untouched.”

He said the Government should take a stake in new projects to provide a boost to the public finances, seeking to emulate Norway’s success in building a wealth fund from its energy sector’s profits.

Mr Miliband last year banned the issuing of new licences to expand fossil fuel production, with around 180 of the UK’s 280 current oil and gas fields expected to shut down in the next five years.The Energy Secretary is being urged to rethink the ban - Wiktor Szymanowicz/Future Publishing via Getty Images

Britain’s energy industry called on the Government to “choose home-grown energy over imports” with the combination of oil, gas and renewables crucial to creating jobs and a secure supply.

David Whitehouse, the chief executive of Offshore Energies UK, said: “Norway’s decision to press ahead with a new licensing round underlines its commitment to long-term, secure supplies for Europe alongside growth in renewable energy.

“With supportive government policies, domestically we could produce half of the oil and gas that will be required to reach net zero by 2050 from UK waters, yet we are becoming increasingly reliant on imports to fill the gap between what we produce and what we consume.”

Oil currently trades for around $67 per barrel. The household energy price cap, set by Ofgem, stands at £1,720 for the average British household. That is up from £1,319 before Russia’s invasion of Ukraine in February 2022.

The Government has argued that there is too little left in the North Sea to be worth restarting exploration and the drilling of new supplies.

A spokesman for the Department for Energy Security and Net Zero said: “We will not issue new licences to explore new fields because they will not take a penny off bills, cannot make us energy secure, and will only accelerate the worsening climate crisis.

“Through the rapid steps we have already taken, we are delivering a fair and orderly transition in the North Sea, with the biggest ever investment in offshore wind and the first of a kind carbon capture and storage clusters.”

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