The North Sea’s regulator said the approval of seven developments this year, worth a combined £4 billion, represented “strong votes of confidence” in the basin.
The North Sea Transition Forum met in Aberdeen on Wednesday, hosted by the North Sea Transition Authority (NSTA) and attended by Minister of State for Energy Security and Net Zero Graham Stuart, the Scottish Government and leading industry representatives.
The group, which sets the strategic direction of the oil and gas sector, met to discuss the outlook for investment in the North Sea – amid signs of “enduring appeal” following a successful licensing round and the approval of a raft of new developments.
The NSTA confirmed seven new projects valued at almost £4 billion and capable of producing 370 million barrels of oil and gas have been given the go-ahead by regulators and investors so far this year.
That includes the approval of field development plans (FDPs) for Talbot, Teal West, Murlach (part of Marnock-Skua), Alwyn East and Rosebank, as well as FDP addendums for the Affleck redevelopment and Alwyn North.
The NSTA said the projects marked “several strong votes of confidence” in the UK North Sea.
Rosebank in particular, approved by the regulator and its operator Equinor in September, is one of the most high-profile approvals of recent years and has been widely seen as a “litmus test” for future investment in major projects in the basin.
The NSTA said the investment case for region has been further buoyed by measures in the UK Government’s Autumn Statement which aimed to bring “long-term stability and predictability” to taxation on the sector.
It follows the Treasury’s Oil and Gas Fiscal review, released last week, in which it was confirmed the Energy Profits Levy (EPL) will end in March 2028 – or earlier if prices fall below specific threshold, set at $71.40 per barrel of oil and £0.54 per therm of gas.
The review also confirmed the government will “remove the tax barriers to oil and gas assets being repurposed for use in CCUS projects”.
However observers noted that enthusiasm could be “dampened” by the proposals for a further mechanism aimed at insulating the market from further “price shocks”.
Meanwhile, since the Forum’s last meeting in June, the NSTA also awarded 27 new licences as part of the 33rd licensing round, and promised “more to follow” in the coming months, in what it called “a clear sign of the North Sea’s enduring appeal.”
In addition, 21 licences were also awarded in the UK’s first ever carbon storage licensing round, adding to the six already in existence, with work now “proceeding at pace” to ensure first injection of CO2 can take place as soon as possible.
Looking to emissions, the regulator pointed to “encouraging progress” with a 23% reduction achieved between 2018 and 2022, but said the more must be done to meet the 2030 target of a 50% reduction.
It comes as a consultation on a draft plan aimed at encouraging industry to go further and faster in their efforts was released in September – the feedback period for which closes on Thursday 30 November.
NSTA chief executive and co-chair of the forum Stuart Payne said: “The North Sea, with its diverse energy systems, sustains hundreds of thousands of skilled jobs and is a vital cog in the UK’s drive to net zero.
“The basin has shown resilience in uncertain times by continuing to attract billions of pounds of investment in projects which support the UK’s energy security alongside a wide range of activities that will both reduce emissions and accelerate the transition – including offshore wind and carbon storage.”