As helicopters buzzed overhead on their way back and forth from North Sea platforms and thousands of delegates shuffled around the grounds of P&J Live, you’d be forgiven for thinking that Aberdeen is a city in its pomp. Even the Scottish Cup trophy made an appearance at SPE Offshore Europe (OE).
But it is not the eighties anymore. The North Sea is not the oil and gas hotspot it once was and, even if Aberdeen FC did win the Scottish Cup earlier this year, Alex Ferguson is no longer leading the local football club to continental dominance.
The halcyon days are over. Once a conference of excess where oil and gas professionals filled their pockets with freebies before indulging in what Aberdeen’s night life had to offer, OE is now instead a meeting of pragmatism.
Let’s cut to the chase: there’s a conflict at the heart of the UK’s energy sector which is inhibiting it. The oil and gas firms which once made abundant profits out of the North Sea are now strangled by the vice like grip of the Energy Profits Levy (EPL). Investment is being curtailed, jobs are being lost and the money that could be used to drive the energy transition is not being generated. It is no surprise that one of the strongest images of the conference was that of a room of raised hands, after OEUK chief executive Dave Whitehouse asked the audience to do so if they knew someone who had lost their job in recent months.
The people and the companies who make up the world-leading supply chain around Aberdeen are committed to reaching net zero by 2050, but policy isn’t allowing them to kick this movement into overdrive.
At a dinner on Tuesday night, DNV’s UK and Ireland chief Hari Vamadevan made the point that by mid-century the country will still require between 13 to 15 billion barrels of oil equivalent (BOE), with anywhere between 2.5 billion and 4 billion coming from the North Sea. Analysts estimate that there is anywhere between 8.5 and 11 billion BOE left in the ultra-mature basin.
The message, therefore, was simple: we’re still going to be using oil and gas by 2050, so why not use our own cleaner resources rather than carbon intense LNG imports? It made for a compelling case for Labour to shift its stance.
Of course, a line of politicians made their way to the north-east of Scotland to show their support to the beleaguered sector. Conservative leader Kemi Badenoch shifted the party’s standing closer to that of Reform’s and to ‘Drill Baby Drill’, but that sort of headline grabbing move didn’t cut much mustard with the sector experts who recognise that North Sea reserves are limited. The SNP’s Kate Forbes – who will step down from her role as an MSP next year – made the point that leaving people and jobs behind is not a transition, but a “betrayal”.
Michael Shanks, the Energy Minister, was the key Labour figure in the Granite City, and delivered a speech on the Tuesday of the conference stressing that the UK government will back the region and its workers. Encouraging policy in areas such as CCS, hydrogen and offshore wind send the right signals but won’t release the sector of the fiscal handcuffs it finds itself in.
Keir Starmer, meanwhile, also made a recent trip to Scotland, making it as far north as Glasgow to highlight Norway’s purchase of five new British warships. The Prime Minister returned to London without taking any questions from the Scottish press pack.
Perhaps it was entirely coincidental that, while the conference was in full flow, Rachel Reeves announced that the Autumn Budget will take place on November 26, but the timing could not have been more pertinent. For the companies who invested the time and resources in making OE a success, they will hope that the statement will unveil tax policies that enable an acceleration of the transition. Independent Wood Mackenzie analysis, unveiled during the conference, emphasised that investment attractiveness “hangs in the balance”. It also provided several key design elements that would make for an effective mechanism. The industry is full of people willing to provide logical, fair answers.
If SPE Offshore Europe 2025 proved anything, it’s that businesses are ready to step up. The people, the technology and the willingness is there. It is homegrown and it’s on our doorstep. It’s now over to government to create the environment that allows it to flourish.
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