50% oil & gas North Sea boost on the UK’s table with cost savings and net zero within reach

October 3, 2025, by Melisa Cavcic

With the United Kingdom’s government currently at a crossroads as it faces a critical decision over banning new North Sea exploration licenses or embracing a so-called science-backed approach that curbs emissions, Wood Mackenzie, an energy intelligence group, has pointed out that such a decision could reshape Britain’s energy future for decades. WoodMac also claims the UK could raise its North Sea production bar by 50% while staying within net-zero targets.

Wood Mackenzie’s analysis has highlighted what is seen as “a counterintuitive truth,” with the UK having the possibility to increase North Sea production by 50% and still outperform the international climate pathways by 25 to 50 million metric tons of carbon dioxide equivalent (MtCO2e) annually through 2050, without choosing between climate action and energy security since such a policy could deliver both.

Gail Anderson, Research Director of North Sea Upstream at Wood Mackenzie, commented: “The North Sea stands at a crossroads, but our analysis shows a clear pathway balancing climate science with energy security. Smart licensing policies targeting known discoveries could extend critical infrastructure life, whilst delivering substantial emissions and cost benefits over importing alternatives.”

WoodMac explains that the UK will depend on U.S. LNG for over 60% of its gas supply by 2035, tripling emissions intensity from 3.7 to 11.3 gCO2e/MJ. The company underlines that every additional trillion cubic feet of domestic North Sea gas saves 15 MtCO2e compared to U.S. imports, potentially exceeding the government’s own platform electrification targets.

As a result, Wood Mackenzie states that the economic case proves equally compelling, with domestic gas costs almost half that of U.S. LNG imports, saving $2.2 billion per additional trillion cubic feet whilst cutting emissions by up to 50 million tonnes annually. The research comes as the government consults on the North Sea basin’s future amid mounting pressure over exploration licensing.

View on Offshore-energy.

The firm’s analysis reveals the advantages of maximising domestic production over imports, creating theoretical headroom for the UK Continental Shelf (UKCS) to produce 2.6 billion barrels of oil equivalent by 2050, as the surplus is perceived to remain within climate science requirements while delivering substantial economic and environmental benefits.

While emphasizing that North Sea exploration has plummeted to unprecedented lows, with recent fiscal turmoil setting 2025 up to become the first year since 1960 without a single wildcat well, the analysis advocates targeted licensing focused on existing discovered resources that could tie back to current infrastructure, as a ban on all new licensing would ignore the strategic value of selective development.

Wood Mackenzie, which has pinpointed 2.3 billion barrels of oil equivalent across 7,634 open and relinquished blocks, with gas comprising over one-third, where only 34 blocks contain resources exceeding 20 million barrels of oil equivalent, has underlined that these blocks total 1.4 billion barrels of oil equivalent and offer crucial tie-back opportunities to maintain host infrastructure viability.

View on Offshore-energy.

The firm underscored: “Critics argue that UKCS crude contributes little to energy security because most gets exported. The reality proves more nuanced. Whilst less than 20% of crude refined in the UK comes from the UKCS – down from over 40% in 2010 – the country remains central to integrated European markets.

“Three-quarters of UKCS crude exports flow to the Netherlands (48%), Germany (11%), Poland (8%) and Sweden (8%). The UK imports refined products back from these countries in complex commodity flows. This integration secures supply for both the UK and its neighbours through sophisticated trading relationships.”

While noting that the UKCS emissions account for just 3% of net UK territorial emissions, the company elaborates that the industry faces disproportionate pressure compared to other economic sectors.

View on Offshore-energy.

Wood Mackenzie has called for a balanced approach, encouraging hydrocarbons, carbon capture and storage, hydrogen, and wind from the North Sea, as the UK is anticipated to consume around 500,000 barrels of oil equivalent per day and remain a net importer even in net-zero scenarios.

Anderson concluded: “The government faces pressure to restrict North Sea production, but risks undermining both climate goals and energy security. The UK needs all types of energy and should encourage more hydrocarbons, carbon capture and storage, hydrogen and wind from the North Sea.

“This balanced approach would deliver the promised fair energy transition, support climate objectives and reduce UK energy costs whilst strengthening supply security.”