BP Explores Sale of North Sea Business as UK Signals Pragmatic Energy Policy

Energy giant BP said on July 31 that it wants to sell its North Sea oil and gas business, marking the latest shake-up in the aging energy basin as the UK’s new government signals a more flexible approach to offshore drilling.BP CEO Meg O’Neill said the North Sea remained an important part of the UK’s energy system but that the assets would be better placed under another owner.“As we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company,” O’Neill said.BP’s North Sea portfolio comprises five production hubs, two of which are in the central North Sea and three are west of Shetland.The announcement came as newly appointed British Prime Minister Andy Burnham indicated his government would take what he described as a “pragmatic approach” to North Sea oil and gas production.Burnham told reporters after taking office on July 20 that he had discussed the issue with U.S. President Donald Trump.“There is a resource there. When people are struggling, you can’t ignore that, and hence me indicating that to the president,” he said.Burnham said he would continue to follow the Labour Party’s 2024 election manifesto but suggested there could be greater flexibility over future oil and gas licensing than under former British Prime Minister Keir Starmer.In a July 19 post on Truth Social, Trump described the basin as one of the “greatest sources of quality oil on Earth,” adding that it could make the UK “one of the Richest Countries anywhere in the World!”Last year, Trump repeatedly urged the UK to expand domestic oil and gas production. During a visit to Scotland later that year, he described the basin as a “treasure chest” that the UK should unlock.Major Energy BasinThe debate over the future of the North Sea comes as official estimates show substantial oil and gas resources remain beneath UK waters.The North Sea Transition Authority (NSTA) said in a 2025 Reserves and Resources report that proven and probable UK oil and gas reserves stood at 2.9 billion barrels of oil equivalent at the end of 2024.A general view of the BP ETAP (Eastern Trough Area Project) oil platform in the North Sea about 100 miles east of Aberdeen, Scotland, on Feb. 24, 2014. Andy Buchananl/Getty ImagesThe regulator said contingent resources, petroleum estimated to be recoverable from known deposits but not yet ready for commercial development, stood at 6.2 billion barrels of oil equivalent.The UK government has maintained an additional tax on North Sea producers. Companies operating in the basin pay the Energy Profits Levy on top of existing taxes.The levy was introduced by the Conservative government at 25 percent on May 26, 2022, increased to 35 percent on Jan. 1, 2023, and then rose to 38 percent under the Labour government on Nov. 1, 2024. It is due to end on March 31, 2030.People look out at an oil tanker formerly known as the Bella-1, before it changed its name to the Marinera, from Hopeman Harbour, at sea in the Moray Firth, Scotland, on Jan. 14, 2026. Andy Buchanan/AFP via Getty ImagesScottish First Minister John Swinney said in a July 31 post on X that the potential sale marked “a time of real uncertainty” for workers, their families, and communities across northeast Scotland.He said the Scottish government would work with BP, trade unions and industry partners to understand the impact of the sale process and support workers.Swinney also renewed calls for the UK government to scrap the Energy Profits Levy, saying the tax was hurting jobs in Scotland’s offshore sector.Scottish Conservative lawmaker Douglas Lumsden described the decision as “deeply worrying” and said it should serve as a “wake up call” to the UK and Scottish governments that the North Sea industry was “at breaking point.”Offshore Energies UK (OEUK) said BP’s decision highlighted the importance of creating conditions that encourage investment.“The Prime Minister has spoken about taking a pragmatic approach to the North Sea. There is now an opportunity to demonstrate that commitment by delivering a policy and fiscal framework that gives businesses the confidence to invest in UK projects,” OEUK Chief Executive David Whitehouse said in a July 31 statement posted on social media.He said investors needed “long-term certainty, a competitive tax regime and a regulatory system capable of making timely decisions.”Reuters contributed to this report.