Burnham's North Sea pledge arrives after BP has already left the building

ON JULY 30th, two days after his predecessor quit and one day before the UK's largest North Sea operator announced it was selling the business, Andy Burnham told reporters he would take a "pragmatic" approach to oil and gas in the North Sea. He was answering Donald Trump, who had claimed that the new prime minister promised to "open up" the basin. Mr Burnham would be more circumspect. "There is a resource there," he said. "When people are struggling, we can't ignore that."

It is a line that has a certain inevitability about it. Every British prime minister since the 1970s has found something pragmatic to say about the North Sea. The trouble is that pragmatism, once stripped of its rhetoric, turns out to be a problem of arithmetic. The North Sea is a mature basin whose easy oil and gas are long gone. New drilling will yield crumbs. And the one company that could still extract them at scale has just walked away.

BP, Britain's flag carrier of hydrocarbons, launched a formal process on July 31st to market its North Sea oil and gas business for sale. The unit has five production hubs and employs about 1,100 people. Its new chief executive, Meg O'Neill, framed the move as portfolio simplification: the North Sea would be "better positioned as part of another company" as BP targets $20bn in asset disposals by 2027 to cut debt. BP's shares rose 1.7% on the news. The market, at least, found the logic sound. For Mr Burnham's promised revival, the timing is disquieting.

How much is left?

Official statistics from the Department for Energy Security and Net Zero, analysed by ECIU, an energy think-tank, tell a stark story. Some 93% of the oil and gas that will be produced from the North Sea between commercial operations beginning in the 1960s and 2050 has already been extracted. New drilling under optimistic industry scenarios would account for just 1-2% of the total. That is not a resource to build energy security on; it is a residue.

Production has been collapsing for decades. North Sea output peaked at more than 4 million barrels of oil equivalent per day in the late 1990s and fell to around 1.1 million last year, according to the North Sea Transition Authority. It is projected to slide to roughly 650,000 by 2030. Gas production in 2025 was 74% below its 2000 peak and met only about half of Britain's demand. Oil production was 77% below its 1999 high. The basin supplies roughly half of Britain's gas needs, with Norway providing about 75% of the remainder through imports and liquefied natural gas, or LNG, the rest. That import share has been the central anxiety of the North Sea revivalists, for whom every lost barrel is a transfer of leverage to foreign powers.

The political trap

Mr Burnham's predecessors faced the same arithmetic but could not escape the politics. Sir Keir Starmer's government, elected in 2024, committed to issuing no new licences for exploration while honouring existing ones. The pledge was designed to thread a needle: satisfy climate campaigners who wanted to leave fossil fuels in the ground, while keeping existing production going to preserve jobs and tax receipts. In practice, it created a policy trap.

Two projects sit at the centre of it. Rosebank, an oil and gas field west of Shetland, and Jackdaw, a gas development east of Aberdeen, were approved under the Conservative government in 2023 but overturned in January 2025 after a legal challenge by Uplift and Greenpeace found that the consent process had unlawfully ignored downstream emissions - the greenhouse gases produced when the extracted fuel is eventually burned. Both projects now need fresh government approval, which is pending. Equinor and Shell are the developers. The public notice period closes on August 17th, by which point Miatta Fahnbulleh, the new energy secretary, is expected to deliver a decision.

Mr Burnham has said he will stick to the 2024 manifesto, which rules out new licences. Rosebank and Jackdaw, however, already hold exploration licences; what is being debated is production consent. That loophole lets Labour proponents argue that approving them does not break the pledge. Mr Starmer's former energy secretary, Ed Miliband, once called Rosebank "climate vandalism" and now sits in the foreign office. Mr Burnham's pragmatism, it seems, requires his cabinet to remember who is who.

The case for more drilling, stated fairly

The argument for developing remaining fields is not merely nostalgic. Domestic gas, delivered by pipeline, carries a lower emissions footprint than imported LNG, which can generate 60-70% more emissions according to the International Energy Agency, because of the energy-intensive processes of liquefaction, transport and regasification. Britain still burns gas for roughly a quarter of its electricity; wind was the largest source in 2025 at 30%, but it is intermittent, and gas-fired plants remain the primary stabilising backup. As long as wind does not blow, someone fills the gap.

There is also an economic case. The North Sea supports thousands of British jobs and billions of pounds in investment. Phasing it out while continuing to consume hydrocarbons does not eliminate demand; it redirects capital and employment overseas. Norway, which meets all its oil and gas needs domestically and then exports ten times as much oil and 25 times as much gas, has managed the transition more gracefully - not least because it retains sovereign control over production through its state fund. Britain's producers are private companies selling at international prices. Consumers get no discount for homegrown barrels.

That last point is important. The newspapers, which published 63 pro-North Sea editorials in the first six months of 2026, according to Carbon Brief, have been the most consistent voice for more drilling. The Sun alone published 25. The argument, recycled daily, is that the North Sea would make energy bills cheaper. It does not. UK oil and gas is sold by private companies on the open market at international rates. More domestic production might slow the growth of imports, but it will not move the price at which British consumers buy fuel. That is set by global supply and demand, not geography.

The deeper problem

The deeper problem is not licences. It is investment. Labour's Energy Profits Levy, a windfall tax introduced during the previous government and retained by Mr Starmer until at least March 2030, sits at a headline rate of 78%. The effective rate, according to Oxford's Smith School, has been closer to 38%, thanks to allowances and deductions. Still, the tax regime, combined with the no-new-licences policy and legal uncertainty around projects like Rosebank, has created a perception of hostility to investment. BP's sale of its North Sea business - and its near-miss sale to Ithaca Energy earlier this year - is the clearest signal yet that capital is looking elsewhere.

BP's departure does not mean the North Sea will empty overnight. Equinor, Shell, and other operators remain. But the basin's decline is no longer solely geological. It is also a function of political uncertainty and a tax code that producers find uncompetitive. Mr Burnham's pragmatism, if it translates into approving Rosebank and Jackdaw, may slow the pace of withdrawal slightly. It will not reverse the trajectory. And if the signal to investors is mixed - approve some old projects while maintaining a hostile tax regime and ruling out new exploration - the result may be precisely what has happened so far: the gradual exit of the companies that have the scale to make remaining extraction economical.

What to do

Mr Burnham faces a choice that his rhetorical pragmatism obscures. He can approve Rosebank and Jackdaw and claim a victory for energy security. It would be a real victory for Equinor and Shell; it would be a marginal one for Britain. Or he can accept that the North Sea is a sunset industry, manage its decline with the same sobriety it deserves, and put the political energy into what actually reduces import dependence: accelerating renewables, grid upgrades, and storage. Wind already generates more electricity than gas. Batteries and demand flexibility are catching up, albeit too slowly for comfort.

The Norway comparison is instructive, but not in the way the North Sea revivalists want. Norway's advantage is not merely that it drills at home. It is that it captured rents through a sovereign fund, invested them in future capacity, and maintained predictable, not punitive, fiscal terms. Britain's approach - high headline taxes, legal reversals, and a manifesto that reads like an industry white flag even when it was not meant to - has achieved the opposite: it has driven the largest operator away while leaving the rest to calculate their exit costs.

Mr Burnham's first job is not to drill more. It is to stop making things worse. That means certainty on the tax regime, a clear timeline for Rosebank and Jackdaw, and a parallel commitment to renewables that is not treated as an afterthought. The North Sea will not save British energy bills. But it does not have to. It just has to be managed with the discipline of an asset in its final chapter, rather than the enthusiasm of one in its first.