OEUK report warns £123bn in UK energy investment faces risk amid falling industry confidence

Billions of pounds in planned investment across the United Kingdom energy sector are at risk as confidence among supply chain firms continues to decline. A new report published by the trade body Offshore Energies UK, known as OEUK, indicates that just over a third of companies in the sector are confident about the next 12 months. The findings suggest that £123 billion of investment has been put in jeopardy through to 2035, driven by a waning belief in the stability of the domestic market. The report highlights a growing disconnect between industry ambition and the commercial realities faced by suppliers, with many firms expressing concern over the current regulatory and fiscal environment.

The survey reveals that 90% of the firms involved derive more than a fifth of their revenue from oil and gas activities. This reliance on traditional hydrocarbons stands in contrast to previous findings from 2025, which noted that 60% of respondents were actively generating revenue from offshore wind, hydrogen, and carbon capture and storage. Despite this diversification, the current climate of uncertainty is deterring further capital commitment. Steve Nicol, OEUK’s supply chain champion and chief operating officer of operations at Wood, stated that the UK supply chain is ready to deliver, with 95% of firms indicating they could expand their capacity if domestic activity rose materially. However, this potential growth is overshadowed by the fact that eight in ten suppliers expect higher growth and investment outside the UK than within the country.

Katy Heidenreich, OEUK’s supply chain and people director, argued that the sector requires clearer and more credible project pipelines to restore investor confidence. She emphasised the need for better procurement and commercial behaviours, as well as earlier engagement with the supply chain. Heidenreich called for investment to be targeted where the UK can genuinely compete, supported by stable fiscal, regulatory, and market conditions that provide businesses with a compelling reason to invest domestically. The report underscores that converting UK offshore energy ambition into a continuous programme of projects and contracts is essential to give businesses the certainty needed to invest, recruit, and grow.

Payment practices remain a significant source of friction within the industry. Nearly 40% of respondents did not agree that correctly submitted invoices are paid on time, a long-standing issue that has prompted legal action from suppliers. Last year, law firm Aberdein Considine noted a 60% increase in suppliers taking legal action over delayed payments. While the North Sea Transition Authority tracks missed payments by operators, its remit does not extend to Tier 1 companies. Unions have previously criticised North Sea players for maintaining a master-slave relationship, squeezing smaller contractors with tight cash flows. More than half of the firms questioned claimed that commercial conditions were worsening, with 46% stating that tariffs and trade measures are having a negative impact on their operations.

OEUK has called on the government to create conditions that allow viable projects across oil, gas, wind, carbon capture, and hydrogen to move forward. The trade body reported that cumulative policy, regulatory, and trade costs are weakening UK competitiveness. Just over 5% of firms anticipate an increase in operating costs and overheads. The report demands that Westminster use public investment to unlock private capital and grow competitive UK capability, while reducing avoidable policy costs and regulatory delays. Industry is simultaneously urged to provide suppliers with clearer timelines, use experience to drive down costs, and improve procurement processes to afford suppliers the time needed to invest in their own capabilities.