ExxonMobil Criticises Labour Over North Sea Drilling Policy And Industrial Impact

Energy giant ExxonMobil has sharply criticised Labour’s policy on North Sea oil and gas, warning that the Government’s refusal to issue new drilling licences risks undermining British industry and economic growth. In a pointed statement, Paul Greenwood, Exxon’s UK chairman, laid blame on Ed Miliband’s ban on new exploration, coupled with carbon taxes and elevated energy prices, for accelerating the decline of North Sea output. Greenwood described current policy as a threat to jobs and a contributor to Britain’s diminishing energy security.

Exxon’s concerns have been brought into sharper focus following its decision to shut down the Mossmorran chemical plant in Fife. The facility, which produced ethylene using ethane from the North Sea, has become economically unviable as policy restrictions have caused ethane prices to soar. Greenwood explained that dwindling North Sea production and rising costs have rendered the plant inoperable, compelling Exxon to cease operations despite months of engagement with government ministers.

Existing North Sea fields are maturing and depleting, with predictions indicating that around 180 out of 280 active sites may close by 2030. The halt on new licences, Greenwood argued, not only reduces domestic output but is likely to lead to higher energy imports, increased emissions as energy products arrive from abroad, and less resilient energy supplies for the UK.

Exxon is not alone in its criticism. The manufacturers’ trade group Make UK has warned that high energy costs and burdensome taxation are threatening the foundations of British manufacturing. Elizabeth de Jong, chief executive of Fuels Industry UK, called the closure at Fife a stark warning about the fragility of the UK’s industrial base.

Responding to criticism, Chris McDonald, the industry minister, noted that the Government had decided against financial support for the Mossmorran plant due to the expense but insisted that the closure did not reflect the overall health of UK industry. The Department for Energy Security and Net Zero was invited to comment on the matter.

As existing reserves decline and government policy remains unchanged, the risk to UK energy security and its industrial sector appears to be intensifying. The issue has ignited debate within the energy sector and among policymakers as the consequences of current government action become increasingly apparent.