UK under-counting oil and gas reserves skewed by policy: industry group

UK authorities are significantly underestimating the country's still-recoverable oil and gas reserves due to policies on tax and the environment that mitigate against maximizing resource recovery, industry group Offshore Energies UK said June 23.

The group based the assertion on an independent report from consultancy Westwood Global Energy Group, which found remaining recoverable oil and gas reserves could be up to 7.5 billion barrels of oil equivalent, compared with a government estimate of 3.75 billion boe published in February 2025.

The findings highlight "a critical distinction between a natural, geologically driven decline and a faster decline driven by policy," OEUK said in a statement. "The UK could meet half of its oil and gas needs from the North Sea, almost double what is currently forecast, while also transforming its energy system to be powered by more renewables," it added.

OEUK called on the authorities to bring forward changes to the upstream tax regime as the government is weighing up the future of the tax system after the expected ending in 2030 of the "energy profits levy," which significantly hiked rates starting in 2022.

A low-case scenario from Westwood Global puts remaining UK production even lower than the government's estimates, at 2.6 billion boe, but as a result of policy decisions rather than geological fundamentals, OEUK said.

The UK is home to the Platts Dated Brent benchmark -- used around the world, and now based on a variety of UK and Norwegian crude grades as well as US WTI Midland crude.

UK offshore hydrocarbon production still meets more than half the country's energy needs, but crude output has been in rapid decline, falling by 11% annually in 2023 and 2024 to average 564,000 b/d last year.

Not maximizing recovery

The debate over remaining reserves reflects a shift in UK strategy, which until 2021 included maximizing "economic recovery" from the North Sea as a legal obligation. This was then watered down with a commitment to also meet net-zero emissions goals.

Upstream investment has been set back not only by high taxation, but also recent policy uncertainties, including the redesign of the process for granting environmental approval for new projects in response to a court challenge by environmental campaigners.

While UK oil and gas reserves are in a late stage of exploitation, a number of companies still have projects on the drawing board for revamping existing fields, tying in "satellite" oil and gas accumulations to existing platforms, or producing hard-to-extract heavy oil, potentially entailing direct linkages to wind farms.

OEUK estimated the additional production not counted by the government could be worth GBP165 billion ($222 billion), in turn yielding significantly more tax.

It notes the UK will still use 13 billion-15 billion boe of oil and gas in a scenario where the country meets its net-zero goal for 2050 -- an assessment predicated on carbon capture and storage projects, currently in the early stage of implementation.

The North Sea Transition Authority, regulator for the offshore industry, said it could not comment on figures from third parties.

Platts, part of S&P Global Commodity Insights, last assessed the Dated Brent benchmark at $78.21/b on June 20.