UK could produce half of oil and gas it needs by 2050 under right conditions: OEUK

The UK could supply half of its projected oil and gas demand by 2050 through domestic production if investment conditions improve, Offshore Energies UK (OEUK) said on March 24 in its 2025 Business Outlook report.

The report, launched at a business event in Aberdeen, shows the UK is currently on track to produce 4bn barrels of oil and gas by 2050, out of the 13-15bn barrels the Climate Change Committee estimates will still be needed in a pathway that reaches net zero by mid-century. With supportive policies, a further 3bn barrels could be extracted domestically, potentially avoiding increased reliance on imports.

The UK’s Labour government hiked tax under the Energy Profit Levy in its last autumn budget, increasing the rate, extending the duration of the tax and removing loopholes that enabled operators to reduce how much tax they pay by committing to more investment. Wood Mackenzie analysts warned at the time that the move could represent a “death knell” for the UK North Sea oil and gas industry.

Such an increase in domestic output could generate an additional GBP150bn ($194bn) in gross value for the UK economy, on top of the GBP200bn expected from existing production plans, according to OEUK. The group said this would support energy security, preserve jobs and supply chains, and complement the acceleration of renewables and low-carbon technologies.

The report also projects that oil and gas will still account for one-fifth of the UK’s energy mix by 2050, even as electricity demand more than doubles.

The findings come amid ongoing government consultations on the future of North Sea energy policy, fiscal terms for oil and gas producers and the upcoming comprehensive spending review. OEUK said continued engagement is essential to ensuring a globally competitive investment environment and to advancing key projects such as those in the Track-2 carbon capture and storage (CCS) programme.

The trade body warned that nine out of ten UK energy supply chain companies are now seeking investment opportunities abroad owing to more favourable business climates. It noted that UK energy production hit a record low in 2023, with over 40% of total energy needs met by imports.

OEUK chief executive David Whitehouse said: “The future of the North Sea is in our hands. Our report shows that as we accelerate renewables, the UK must also make the most of its own oil and gas – or choose to increase reliance on imports.”

“Energy security is national security,” Whitehouse added. “Homegrown oil and gas, alongside renewables, pays taxes, supports jobs and safeguards the supply chains we need to build our energy future.”

The Aberdeen event launching the report was sponsored by Deloitte NSE.