New Prime Minister Andy Burnham has promised a ‘pragmatic approach’ to North Sea oil and gas, signalling that existing fields could be expanded as the Government tries to protect jobs, improve energy security and ease pressure on the economy.
The shift stops short of abandoning Labour’s ban on entirely new exploration licences but could allow more production from areas where companies already hold rights to drill.
Burnham said Britain could not ignore domestic resources while households and businesses were struggling with high energy costs.
He said: “I said to the President that we will take a pragmatic approach to the North Sea because we have to recognise the reality of where we are as a country.”
The comments followed his first telephone conversation with Donald Trump, who claimed the new Prime Minister had promised to reopen the North Sea.
Speaking at the White House, the US President said: “I spoke to him and he said he’s going to open up the North Sea oil. If he does that, you’re going to be a really rich country.”
However, Burnham has not announced a return to new licensing rounds and the Government has reiterated that Labour’s 2024 manifesto commitment remains in place.
The more immediate change could involve faster decisions on developments that already hold licences, including the Rosebank and Jackdaw fields.
Both projects have been delayed by legal and regulatory challenges but industry sources expect the Government to reach decisions quickly, as it tries to give investors greater certainty.
Ministers are also understood to be considering greater use of tiebacks, where smaller discoveries are connected to existing platforms and pipelines rather than requiring entirely new offshore infrastructure. That could allow additional production without issuing licences for unexplored areas, offering Burnham a route to support the industry while maintaining the formal ban.
North Sea operators and trade unions have warned that declining production, taxation and political uncertainty are driving investment and skilled jobs overseas.
Supporters of further development argue Britain will continue consuming oil and gas for decades and should produce more of it domestically, rather than increasing dependence on imports.
Climate campaigners say opening additional fields would undermine emissions targets and would not materially lower household bills because fuels are traded at international prices.
The approach could also expose divisions inside Labour, with senior figures continuing to oppose any significant expansion of fossil fuel production.
Burnham is attempting to balance those competing pressures by separating new exploration from fuller use of existing licences and infrastructure.
The first real test will be whether the Government approves Rosebank and Jackdaw – and how far it allows companies to expand production through existing North Sea assets.
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