North Sea Oil and Gas Industry

Andrew Bowie Excerpts

Monday 27th October 2025 Commons Chamber

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the future of the North Sea oil and gas industry.

[The Minister for Energy (Michael Shanks)]

The North sea will be at the heart of Britain’s energy future. For decades its workers, business and communities have helped to power our country and our world, and they will do so for decades to come. The oil and gas industry has lost around a third of its entire workforce in the last decade as oil and gas production has declined. A plan is now needed. That is why in March we consulted on a framework for building a world-leading offshore clean energy industry in the North sea, alongside managing existing oil and gas fields for their lifespan. We will respond to that consultation in the coming weeks.

Alongside that, we published our clean energy jobs plan, which sets out that over 400,000 more good jobs are to be created across the UK, including 40,000 in Scotland, by the end of the decade. That is facilitated thanks to record investments in clean energy as well as over £50 billion of private investment since July 2024 thanks to the certainty our plans have created.

Turning to today’s news, colleagues will be aware that Petrofac Ltd has for some time been working on a restructure relating to its global portfolio. The restructuring plan failed, following the unexpected termination of a contract by TenneT—a Dutch transmission company. At 7 am today, holding company Petrofac Ltd announced that it will be entering administration. While that is obviously disappointing for the company, it is the product of long-standing issues with its global business.

Contrary to misleading reports today, the UK arm of Petrofac has not entered administration and is continuing to operate as normal—as an in-demand business with a highly skilled workforce and many successful contracts. Indeed, only last month Petrofac’s UK arm extended two significant contracts, demonstrating that the business has a viable future. Today’s announcement covers only the top-level holding company Petrofac Ltd, which has no employees. The Petrofac group has faced long-standing challenges, including a high-profile £77 million financial penalty imposed in 2021 following a Serious Fraud Office investigation into bribery.

We understand that there is reason to be optimistic about a commercial resolution that includes the UK arm. The Government have been, and will remain, in close contact with the company. I repeat this to the House: the UK business has not entered administration. It is successful and growing, and it will continue to operate as normal.

[Andrew Bowie]

Another week and yet another hammer blow to our North sea oil and gas industry, another gut punch to energy workers and another blow to our energy security. Whatever the Minister says today, the blame lies squarely with this Labour Government. [Interruption.] They do not like to hear it, but it is true.

Today, the energy giant Petrofac has entered administration, casting doubt over the future of its 2,000 employees in Scotland—as its global headquarters is in Aberdeen—and the countless more who are supported indirectly through the supply chain. As the Minister said, this company has had issues for many years, but the hostile environment in the UK continental shelf created by the Government has made operating here nigh on impossible for far too many companies.

Our offshore energy industry has seen thousands of redundancies since the 2024 general election. Harbour Energy completed a new round of redundancies just last month and, with depressing regularity, we hear of more job losses in the North sea. Whether at Harbour Energy, Apache, Hunting or Petrofac, each job lost means uncertainty for a family, a mortgage jeopardised, investment fleeing our communities and our world-class supply chains and skilled workforce pushed towards extinction.

How many more will it take for the Secretary of State to change course? These are political choices. This is a manufactured decline. As a direct result of the hostile trading environment, the “closed for business” sign is hanging over the UK continental shelf. From the energy profits levy extension increase to the ban on new licences and the refusal to defend the Government’s decision on Rosebank and Jackdaw, the odds are stacked against the North sea industry, damaging the business environment, threatening investment, harming our economy and undermining our energy security. These are political choices that have resulted in job losses.

What steps are being taken to support Petrofac’s HQ employees in Aberdeen? How many more jobs have to be lost across the industry for the Government to change course? When will the thousands of jobs promised through GB Energy for Aberdeen and around the United Kingdom materialise? Will the Minister personally act and ask his boss—the Secretary of State for Energy—to change course, or is he content to sacrifice Aberdeen, the north-east and our energy industry on this vainglorious campaign to destroy our fossil fuel industry?

[Michael Shanks]

On Petrofac, the hon. Gentleman should be careful with his tone. To come here and try to undermine efforts to find a buyer for the UK arm and to talk down a business, which, as I just outlined, is a successful and growing business in the North sea, is deeply irresponsible. There have been long-standing issues at the company; he of all people should be well aware of that, given his previous role as a Minister in the Department for Energy Security and Net Zero. All of us across the House have a responsibility to support the company at the moment, not to undermine it, and to send a positive message to those workers, the suppliers and the customers that the UK arm is continuing to operate as normal. All the signs are that there is a viable long-term future for the company, but that will not happen if we have comments like those made by the hon. Gentleman undermining that business.

On the wider question of the North sea, the hon. Gentleman should know as well as anyone that we lost over a third of the jobs in the North sea during the Conservative party’s time in government. He wants to pretend that the transition arrived in July 2024, but he was in government when those jobs were going, and the Conservatives failed time and again to come up with any credible plan for managing the future of the North sea. We will not do that. We will come up with a plan. That is why we are building the industries of the future on hydrogen, on carbon capture, on offshore wind and on the supply chains—the very investments that he and Conservative Members turn their backs against time and again. They are turning their backs on the future of the energy story in the North sea as they are more interested in exploiting problems than solving them. Time and again, they have learned no lessons from their time in government, when they left these workers without a credible plan. We will not do the same again.