Action call as BP announces North Sea sell-off

The Scottish Government has urged Prime Minister Andy Burnham to take “urgent action” to save jobs after BP announced plans to sell its North Sea operations.

The business employs around 1,100 people and achieved production levels of 117,000 barrels of oil equivalent per day last year.

Chief executive officer Meg O’Neill said the North Sea “remains integral to the UK’s energy system” but BP is now focusing on its “highest-value” opportunities.

The news comes days after Burnham said he told US President Donald Trump that he would take a “pragmatic approach” to North Sea production, saying “we can’t ignore” the resource available.

Responding, Aberdeen & Grampian Chamber of Commerce hit out at “years of policy uncertainty, punitive taxation and mixed messages about the future of the industry”.

Its chief executive Russell Borthwick said: “Today’s announcement from BP should be a defining moment for the new prime minister. How many more jobs need to be lost before the UK Government acts?”

Scottish Government energy minister Stephen Gethins said: “BP has a long and significant history in the North Sea, making a substantial contribution to the economy over 60 years of production. The commercial decision announced today of a sale of its assets will cause uncertainty for workers. The Scottish Government is ready to engage with BP and other partners to understand the impacts of the sale process and to support the workforce.

“Scotland’s future prosperity – and our contribution to energy security – are reliant on North Sea energy production and, crucially, the skills and experience of that workforce, not least in the North East.

“We need to see a parallel track approach to the energy transition in which North Sea oil and gas production is managed alongside the increasing deployment of renewables. What is happening at the moment is that reserved policies such as the Energy Profits Levy are driving an accelerated decline of North Sea oil and gas before renewables are fully ready to meet our energy needs.

“We are committed to doing everything within our limited powers to ensure the future success of the offshore energy industry, working with local communities, businesses and the UK Government. The UK Government needs to take urgent action to protect jobs, energy security and investment in our energy sector.”

However, Scottish Greens energy spokesperson Kristopher Leask commented: “This is a stark reminder that no amount of political spin can reverse decades of geological decline. Andy Burnham cannot drill his way out of that reality.

“After more than 60 years, BP has decided that its North Sea oil and gas business is no longer one of its highest-value opportunities. Our immediate concern has to be for the workers directly affected and the thousands more across the supply chain. 

“Workers deserve firm guarantees and a credible jobs plan, not being passed around between multinational corporations while politicians pretend that another round of drilling will fix the problems.

“The North Sea is a mature basin with reserves in terminal decline. Most of what remains is oil, roughly 80 per cent of which is put on tankers and shipped overseas, doing very little to improve our energy security. After 60 years of drilling, the UK has already burned most of its gas and  employment will decline regardless of production levels. 

“The choice is clear: an orderly, worker-led transition or allowing more chaotic corporate retreats like this one.”

Posting on social media, Scottish Conservative MP Harriet Cross said the news “shouldn’t come as a surprise to anyone, least of all the government”.

“Labour have created the most hostile environment they possibly could for oil & gas companies to invest,” Cross said.

“They are overseeing the death of one of the UK’s most important industries. Burnham better wake up.

“He needs proper change - not a fudge, not a fence sitting exercise to, he thinks, “keep both sides happy”.

“He, and Labour, should be on the side of UK jobs and UK energy security.

“For that, he must end the ban on new licences, end the EPL and permit Rosebank and Jackdaw.”