Campaigners warn that Britain is unable to process half of the oil produced by new North Sea wells.

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Rishi Sunak’s plan to boost the energy security of Britain by granting new North Sea licenses each year is being questioned by those who claim Britain won’t be able to handle crude oil.

Campaigners warn that by 2035 up to half the oil produced from the North Sea won’t be compatible with UK refineries.

The refineries in Britain are designed to process what is called light crude oil.

Global Witness’ analysis shows that 25pc or so of the crude oil produced in Australia is currently classified as heavy. This proportion will likely increase to 50pc within the next 10 years.

If no new refineries are constructed, Britain will have to export an increasing amount of oil from its North Sea.

Alice Harrison of Global Witness said: “Rishi’s obsession with oleo is a false flag.

The UK cannot process the oil it produces, and a new analysis shows that the situation is only worsening.

Official data shows that the UK exports about 80pc (or around 80 % of its crude oil) to countries like Germany, Poland, China, and the Netherlands.

The government has stepped up its efforts to increase domestic oil and gas production, promising to allow companies to bid for new licenses each year to drill in North Sea.

Claire Coutinho said Monday that the move would boost tax receipts and boost the UK’s energy security, but admitted it would not do much to reduce bills.

The government spokesperson said that this is a fundamental misunderstanding of the oil markets and ignores completely the fact that new oil and natural gas licenses support UK jobs, generate tax revenue and attract investment.

Most of our oil is sent to EU partners including Ireland, France, and Sweden to be refined and turned into products that the UK needs.

Oil and gas will be a key part of the transition to net zero.

North Sea reserves have been declining for a long time, but experts in the industry say that due to its geology, new drilling will be required continuously to maintain a gradual decline and avoid a sudden drop.

The latest proposals from the Government are meant to create a clear division on energy issues between them and Labour, who has promised to ban new oil-and-gas licences should they win power.

Ministers and industry executives have argued that a total ban is not logical because it would force the UK simply to import more gas and oil from abroad rather than do anything to address the underlying demand.

According to the Energy Institute, the UK’s refining capacity reached its peak in the 1970s, with 23 refineries processing just over 150 million tonnes of oil per year. Since then, it has declined by over half.

Currently, there are only six refineries in operation. The Institute stated that falling profit margins, increased foreign competition and declining profit margins have made it commercially unattractive to open new refineries.

Refineries are focusing on “light” crude because it is easier to convert into products like petrol.