24th June 2026
A major part of the argument being made by the industry, many workers in Aberdeen, and opposition politicians is that we should allow more exploration and use the oil rather than importing it. However, it is not the whole story.
There are really three separate factors affecting North Sea investment:
1. UK Government policy
The UK government's windfall taxes and net-zero policies have undoubtedly reduced investment incentives.
The industry has repeatedly argued that:
The Energy Profits Levy ("windfall tax") reduced expected returns.
Frequent changes to tax rules created uncertainty.
Restrictions on new licensing rounds discouraged long-term investment.
Investors prefer jurisdictions where policies are more stable.
Companies such as Harbour Energy and Serica Energy have publicly criticised UK policy and reduced some planned spending in the North Sea.
2. Scottish Government opposition
The Scottish Government does not directly control offshore oil and gas licensing—that remains reserved to Westminster.
However, critics argue the Scottish Government has:
Opposed major developments such as the proposed Rosebank Oil Field expansion.
Sent political signals that Scotland sees oil and gas as a declining industry.
Made planning and environmental approvals for some onshore infrastructure more difficult.
Supporters of the Scottish Government would respond that they are trying to balance jobs with climate commitments and that many planning decisions are constrained by environmental law.
3. Global market forces
This factor is sometimes overlooked.
The North Sea is:
One of the world's oldest oil provinces.
More expensive to operate than many Middle Eastern fields.
More expensive than many US shale operations.
Producing less oil than it did in the 1990s and early 2000s.
Even without net-zero policies, many companies would still be investing less than they did twenty years ago because the easiest and cheapest reserves have already been developed.
How much does each factor matter?
People disagree sharply.
The industry's view is often:
Government policy: 60–70% of the problem.
Geology and maturity: 30–40%.
Environmental groups often argue:
Geology and economics: 60–70%.
Government policy: 30–40%.
The truth is probably somewhere between the two.
Why Aberdeen is particularly frustrated
Many workers feel they are caught in the middle.
Their argument is:
The UK still imports large amounts of oil and gas.
Demand has not disappeared.
If Britain is still consuming hydrocarbons, producing them domestically supports jobs and tax revenues.
Importing from countries such as Norway, Qatar or United States does not necessarily reduce global emissions.
That argument has considerable support in northeast Scotland.
Looking ahead
Ironically, if electricity demand rises sharply because of AI data centres, electric vehicles, heat pumps and industrial electrification, Scotland could see a new investment boom—but much of it may be in:
Offshore wind,
Grid upgrades,
Battery storage,
Hydrogen,
New transmission infrastructure.
The political question for Aberdeen is whether enough of the skills from oil and gas can transfer into those sectors quickly enough to replace the jobs and investment being lost from the North Sea.
That debate is likely to become even more intense if oil prices fall further because of increased Iranian exports and a reduction in geopolitical tensions. Lower oil prices make many North Sea projects less attractive regardless of government policy.