Rachel Reeves: 'Critical' weeks for Chancellor to secure North Sea oil and gas industry survival
Chancellor Rachel Reeves will set out the government’s budget in a matter of weeks - and the oil and gas industry have high hopes for investment.
A leading energy expert says the next few weeks are “critical” for the Chancellor to deliver for the North Sea oil and gas industry.
David Whitehouse, chief executive of Offshore Energies UK, said job losses, like those threatened by this week’s administration announcement by oil services firm Petrofac, could be avoided if the UK government commited to supporting the industry in the upcoming Budget.
The Chancellor is due to unveil the UK government’s 2026/27 Budget on November 26. Mr Whitehouse said Rachel Reeves must set out reforms to the windfall tax, further support for existing oil and gas infrastructure, and grant consent for the Rosebank and Jackdaw oilfields.
Speaking to The Scotsman, Mr Whitehouse said: “I cannot emphasise how critical the next few weeks are up to the budget. The truth is we are seeing job losses. For those of us who work in the sector, we know friends, colleagues and partners who’ve lost their jobs.
“It’s happening and it’s real, but it does not have to be this way. It is imperative we see investment in the sector that will support jobs and the wider transition, but we need the government to act on November 26.”
The warning comes just days after Petrofac filed for administration, potentially affecting 2,000 Scottish jobs. Mr Whitehouse said more job losses like this would happen in the future unless there was a change in the government’s stance on oil and gas.
He said: “What we’ve seen in the last few months is a number of announcements by companies like Belmont going into administration and Harbour Energy cutting jobs. We are seeing a slowdown in activity in our North Sea, and from an oil and gas perspective we believe there to be 1,000 jobs a month being lost.
“We expect that trend to continue unless we see a change in government policy and that is the wrong thing for the UK, definitely the wrong thing for Scotland, and certainly the wrong thing for Aberdeen.”
Labour’s position is to grant no more exploration licences for new oil and gas fields. However, there is speculation the UK government will still give consent to the Rosebank oilfield off the coast of Shetland, as it has already been granted an exploration licence.
Equinor, the Norwegian state oil company developing the oilfield, has admitted progressing Rosebank would release 250 million tonnes of planet warming gas.
Last week Prime Minister Sir Keir Starmer told The Scotsman he was “doubling down” on oil and gas being in the UK’s future energy mix.
Mr Whitehouse said he has heard “good language” from the UK government ahead of the looming Budget, and was pleased to see ministers recognising the need to have oil and gas alongside renewables in the future.
He said: “It is really important for the 200,000 people who work in the oil and gas sector. There are practical steps the government can take to support these high-quality jobs.
“Something that makes real sense for the Budget in three weeks’ time is reforming the windfall tax and replacing it with a long-term, permanent mechanism. We want to see the pragmatic outcomes on the future of the North Sea consultation, which would support existing infrastructure, terminals and pipelines.
“And then we need to start seeing Jackdaw and Rosebank. They’ve gone through the appropriate environmental impact assessments and been approved.
“If the government can take in all of that over the coming days and weeks, it could be a really critical Budget. If they do that, we’ve identified over £40 billion worth of projects that could be unlocked in oil and gas that supports 160,000 jobs between now and 2030.”
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