BP sells North Sea assets amid claims of government negligence

Former Oil and Gas UK boss Malcolm Webb has described the departure of BP from the United Kingdom as a direct result of what he terms gross negligence by successive governments. The announcement that British Petroleum intends to sell its operations on the UK Continental Shelf has triggered significant backlash from trade unions and business leaders alike, who are now calling for substantial changes in Westminster policy regarding oil and gas.

New energy secretary Miatta Fahnbulleh responded immediately to the news with a pledge to protect workers and local communities during the sale process. She stated that she is maintaining close contact with BP to ensure these priorities are met throughout the transaction. The North Sea remains described as a vital national asset, with officials emphasising that oil and gas will continue to form part of the energy mix for years to come. Fahnbulleh expressed a pragmatic approach to the situation while focusing on doing right by the generations of workers who have powered the country from the region.

Webb argued that projects on the UK Continental Shelf no longer meet the criteria sought by major oil companies like BP, noting that successive administrations have accelerated the exit of big firms. He accused current and past governments of failing to provide adequate support for independent companies to take over remaining reserves. Instead, he claims the industry has been repeatedly over-taxed and over-regulated, with the current administration allegedly blocking exploration for new prospects. Webb insisted that BP is not responsible for the decline in the North Sea, attributing it wholly to government policy.

The sale announcement coincided with news that BP plans to cut approximately 700 jobs from its global headcount as part of a strategy under chief executive Meg O’Neill to create a simpler and stronger company. In correspondence sent to staff, Ms O’Neill explained that the UK business would be better positioned within another organisation while retaining world-class people and resilient assets with a proud heritage.

Market reaction was positive following Friday’s announcement, with BP share prices climbing slightly throughout the day in London. The supermajor has long sought to develop the third phase of its Clair field, which consists of three stages with the first two already completed. Clair Ridge began production in 2018 as part of the second phase, and an expansion remains a potential project for the company. The proposed third phase involves delivering the Clair South development.

Last year, BP indicated it was considering further options after a well from the Ridge platform exceeded expectations, though no updates have been provided since regarding the Clair South plan. If a buyer is found for the North Sea business, this development would likely be high on the priority list. In an interview with Energy Voice in 2024, Doris Reiter, then senior vice president of BP North Sea and now based in Europe and Atlantic Africa, explained how UK tax policy limits development potential.

She noted that under a favourable fiscal environment where investment allowances are fully retained and there is clarity on the end date for windfall tax, the company could operate for many more years. The firm has been present in the region for sixty years with a strong business presence.