BP Plc is preparing to sell its entire offshore portfolio in British waters, a pivotal moment for the country's shrinking hydrocarbon sector just as Prime Minister Andy Burnham weighs new exploration approvals. As one of the country's largest companies and the last oil major with a separately run North Sea unit, BP is exiting in a move that carries political weight as well as financial consequences.
After replacing Keir Starmer as the country's leader last week, Burnham has indicated he might take a softer line on hydrocarbon exploration in the seas around Scotland. That places him between environmentalists and trade unions, two groups crucial to his Labour Party. Rival parties contend that additional drilling could lower household bills.
BP's move comes after years of friction between North Sea producers and successive governments. In 2022, the Conservatives slapped a windfall levy on North Sea oil and gas output, and producers responded that the tax made investment unviable. The Labour administration, in power for two years, extended that levy and stopped issuing new exploration licences.
BP's departure "should be a defining moment for the new prime minister," said Russell Borthwick, who heads Aberdeen and Grampian Chamber of Commerce. He added that the decision was "another stark reminder that confidence in the UK continental shelf has been badly shaken" after policy instability, high taxes and conflicting signals.
Investors and energy executives are waiting to see whether Burnham changes course. President Donald Trump has taken a close interest. During their first call, Burnham told Trump that his approach to drilling would be "pragmatic." Trump welcomed that and said the prime minister had "pledged to open up the North Sea."
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On Thursday, Burnham defended his position: "There is a resource there. When people are struggling - you can't ignore that."
Trump regularly criticised Starmer for refusing to back new North Sea projects. His decision to attack Iran has also unsettled global oil and gas markets, making the choice between renewables and fossil fuels more politically charged. Wildfires across Europe, including one in Suffolk, have kept climate change high on the agenda.
Whether to approve the Jackdaw and Rosebank fields is the most pressing choice facing Burnham's government. Adura, a joint venture between Shell and Norway's Equinor, operates both. Rosebank, the biggest untapped field in UK waters, is thought to hold between 300 million and 500 million barrels of oil equivalent.
The two projects are now in the public comment phase. Anonymous administration sources said Burnham would probably approve Jackdaw at minimum, while maintaining the freeze on new exploration licences inherited from Starmer.
Andrew Griffith, the Conservative shadow business secretary, said: "This is one of those 'moments' that should serve as a deadly serious wake up call. Britain needs to compete - for energy, capital and talent - but the government carries on putting up taxes and piling on red tape."
BP's decision is part of a wider exodus. Shell and TotalEnergies have folded their North Sea operations into independent units, while Chevron and ConocoPhillips have already sold out. BP had already been retreating for several years, offloading part of the Shearwater field to Shell and handing the Forties pipeline system to Ineos. It retains a 45% interest in Clair, the UK's largest oilfield, and turns out roughly 100,000 barrels of oil equivalent per day from five hubs, a small portion of its total daily output of 2.3 million barrels.
BP chief executive Meg O'Neill said the UK remained important to the company, but "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."
Greenpeace UK political campaigner Angharad Hopkinson cautioned against clinging to a declining basin. "Pragmatism means facing reality, not clinging to a dying basin while communities, the economy and the climate all demand a more secure future," she said.
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