Decommissioning spending is set to overtake capital investment in the North Sea from 2029 — a trajectory that amounts to economic self-harm, writes INEOS Energy chairman Brian Gilvary.

The UK government's forthcoming decision on whether to approve the Jackdaw and Rosebank fields will mark a pivotal moment in the history and future of the North Sea. Almost £11bn of private investment is waiting in the wings, and the outcome will signal whether Britain can regain its reputation as a serious place to invest in energy. The decision follows the Supreme Court's 2024 ruling in the Finch case, which found that downstream emissions from burning extracted oil and gas must be considered in environmental assessments — a judgment that forced regulators to revisit consents for both fields and has kept their futures in limbo.

Approval would send a positive signal, but the issue extends far beyond two projects. Years of policy instability under consecutive governments, restrictions on new drilling and the Energy Profits Levy (EPL) have made it extremely difficult to build a business case for investment, causing capital to dry up. Introduced in 2022 in response to surging energy prices after Russia's invasion of Ukraine, the windfall levy has since been extended and increased, lifting the total tax rate on North Sea profits to 78% and prompting warnings from the industry that projects were becoming uneconomic.

Accelerating the closure of the UK North Sea does nothing to reduce global emissions, Gilvary argues. Demand for oil and gas persists, meaning production and carbon emissions are simply exported, depriving the UK of valuable jobs, investment and tax revenues. This, he writes, is damaging the country's energy security and long-term national wealth.

"Let's call this what it is," he writes. "This is not managed decline; it is ideological destruction of a national resource owned by the country in the name of net zero."

The decommissioning paradox

Approving Jackdaw and Rosebank will not on its own undo years of damage.

Having been told for years that the UK North Sea is not a reliable place to deploy capital, operators have voted with their feet, closing fields and redirecting investment. Last month, BP became the latest in a long list of operators to announce it was shutting up shop and directing investment elsewhere, putting its UK North Sea oil and gas business up for sale.

Ironically, much of that investment has been channelled into the very same basin, but under a different flag. Norway now invests roughly 10 times more than the UK in its own continental shelf, and even exports some of that gas back to UK shores — a reversal of fortune for a basin where UK production once led the world.

When investment disappears, fields close earlier and decommissioning is brought forward. The North Sea Transition Authority recently revealed that almost a quarter of all spending in the basin over the next five years will go towards shutting infrastructure down rather than building it up. From 2029, decommissioning spending will overtake capital investment.

The accelerated decline of the North Sea carries another important and often overlooked consequence for the Treasury. Companies can offset a significant proportion of decommissioning costs against tax. Premature closures therefore do not simply switch off future tax receipts — they bring the bill forward.

Current estimates suggest the combined impact of decommissioning tax relief and lost tax revenues could approach £13bn by 2035. At a time when public finances are already under pressure, accelerating that liability amounts to economic self-harm, Gilvary writes.

What does stability look like?

Oil and gas will remain part of Britain's energy mix for years to come, he argues. The question is not whether the UK uses these resources, but whether it produces them itself or pays other countries to do it instead.

A decision to allow Jackdaw and Rosebank to proceed would send an important signal about the direction the country intends to take. However, a green light for both fields alone is not enough. Beyond this, Gilvary calls for a more stable fiscal regime that gives operators the certainty they need to invest, the removal of government restrictions on new drilling, and reform of the EPL.

The government now faces a choice, he concludes: responsibly manage a critical natural resource and pillar of UK energy security while protecting jobs and tax revenues — or accelerate its decline, exporting emissions and increasing imports at a time of global instability, and leaving a gaping hole in the Treasury's pocket. The Jackdaw and Rosebank rulings will be the first clear indication of which path it has chosen.

Brian Gilvary is the chairman of INEOS Energy.