Sanjoy Sen is a chemical engineer. He contested Alyn and Deeside in the 2019 general election.
When I landed on a BP oil platform a decade ago, I spotted the plaque. Opened (albeit remotely) by Margaret Thatcher in 1983, this multi-million pound installation was a big deal, not just for BP but for Britain. Not quite “what’s good for General Motors is good for America” but you get the drift.
So, after 60 years of production, it is again a big deal that BP has just put its UK North Sea portfolio on the market.
Now, some context is important here. Despite the fact that BP is still headquartered in London, Britain plays an ever-smaller role in the firm’s global operations. These days, the dwindling UK Continental Shelf delivers barely 5 per cent of its daily 2.3 million barrel output. Every multi-national prioritises shareholder value and, put simply, BP gets more oil (and profit) per dollar invested in its giant fields in the USA, Azerbaijan and Iraq.
But the political angle can’t be dismissed, either. Theories abound as to the drivers behind BP’s departure, from Miliband’s exploration ban to the punitive Energy Profits Levy. And, even after all these years, it’s still not too late to blame for opponents to blame Thatcher.
So, is this the end of the North Sea as we know it – and are there wider lessons to be learned? It begs the question – what have BP done for us?
The BP story is a lengthy yarn dating back to its Anglo-Persian days at the turn of the 20th century. But whilst Iran and its oil supply remain a thorny issue to this day, let us confine ourselves here to its UK operations.
BP made Britain’s first ever North Sea discovery, the 1965 West Sole gas field off Yorkshire. Resplendent in corporate green, the late Queen headed to Aberdeen to open the multi-billion barrel Forties oil field in 1975. Further North Sea discoveries followed (Bruce, ETAP, Magnus) whilst under serene Poole harbour, BP discretely developed Wytch Farm, Europe’s largest onshore oil field. More recently, BP has led the way in the harsh conditions of the Atlantic margin, west of Shetland (Schiehallion, Clair). Moving with the times (not always successfully) BP has also invested heavily in the energy transition, from solar farms to its electric vehicle charging network.
Although the sell-off is big news, BP has been exiting Britain for some time now. Forties was sold to the Apache Corporation over twenty years ago. Since then, the American independent has kept production buoyant, ploughing billions into drilling and infrastructure projects unlikely to have met BP’s tougher investment hurdles. The Sullom Voe terminal on Shetland, the Forties Pipeline System and even BP’s petro-chemicals business are now all under new ownership.
So, was BP’s exit inevitable?
BP are not unique in leaving the North Sea. Nowadays, a raft of smaller independents extract value from mature assets discarded by supermajors. American giant ConocoPhillips sold up to private-equity Chryasor (now Harbour Energy) in 2019. Others have consolidated their UK activities. Adura combines the Shell and Equinor portfolios, including the contentious Jackdaw and Rosebank discoveries. Italy’s ENI has diversified into Britain’s renewables and carbon capture markets. “Right assets, right hands” was a mantra of the offshore regulator, the OGA.
Whilst BP were always likely to seek out greener pastures, its departure might have been delayed. Its current portfolio consists of large fields (by North Sea standards) and relatively modern infrastructure. But with the Energy Profits Levy still in place, the offshore marginal tax rate remains an eye-watering 78 per cent. And whilst last year’s North Sea Future Plan creates wriggle room for localised ‘tieback’ drilling, the ban on future exploration doesn’t leave the sector anywhere to go. Even lean-and-mean Apache are finally throwing in the towel at Forties.
Opponents contend that the problems really began when Thatcher sold Britain’s oil off. As ever, the reality is more nuanced. Tony Benn’s vision of an offshore British Leyland was mostly thwarted long before 1979.
BP fended off full nationalisation in the seventies, even citing a 1914 letter promising no government interference in Anglo-Persian. Joining the EEC prevented Benn’s own creation BNOC (later Britoil) from acquiring controlling stakes in licences. In the end, Dennis Healey, seeking an IMF bailout, sold off millions in BP shares just to keep Britain afloat.
Then there are the engineering realities. West Sole took barely 18 months to enter production despite a tragic accident soon after its discovery. Bringing Forties on stream in five years required a billion-pound investment in barely-proven offshore technology. At a time of economic challenges and industrial strife, a state-owned enterprise would have struggled to match that delivery. (For context, this was the same period when the British government was propping up a strike-prone car industry and ‘investing’ taxpayer funds in the new Morris Marina.)
Despite global evidence of National Oil Company (NOC) under-performance, proponents of state ownership focus on Norway’s Equinor, formerly Statoil. But whilst highly successful, the Norwegian sector is far from a nationalised idyll: multi-national giants (including BP) have invested there from day one. Even Equinor itself is partially privatized. And, of course, Norwegian oil is traded on global markets.
Instead, the learnings from our Scandinavian neighbours are quite different. There, public and private enterprise have successfully co-existed for years: perhaps a lesson for us in other sectors. And Norway’s offshore tax regime, whilst high, has been historically stable, compared to the endless meddling by UK chancellors which eroded investor confidence.
That long-term vision has translated into energy security, allowing Norway to export its hydrocarbons whilst meeting its own needs from domestic renewables. By contrast, Britain allowed its only major gas storage facility, Rough, to close in 2017, a move that back-fired as soon as Russian tanks rolled into Ukraine. And the former BP refinery at Grangemouth shut in 2025 leaving the UK with just four refineries, insufficient to meet national requirements.
Until recently, the proposed buyer of BP’s UK assets was the fast-growing Ithaca Energy. Expect further headlines if negotiations re-start: Ithaca’s portfolio includes the stalled Cambo field plus a stake in Rosebank. And its largest shareholder, Delek Group, is based in Tel Aviv of all places.
Controversy awaits. Not that Mrs. T would have minded.
Sanjoy Sen is a chemical engineer. He contested Alyn and Deeside in the 2019 general election.
When I landed on a BP oil platform a decade ago, I spotted the plaque. Opened (albeit remotely) by Margaret Thatcher in 1983, this multi-million pound installation was a big deal, not just for BP but for Britain. Not quite “what’s good for General Motors is good for America” but you get the drift.
So, after 60 years of production, it is again a big deal that BP has just put its UK North Sea portfolio on the market.
Now, some context is important here. Despite the fact that BP is still headquartered in London, Britain plays an ever-smaller role in the firm’s global operations. These days, the dwindling UK Continental Shelf delivers barely 5 per cent of its daily 2.3 million barrel output. Every multi-national prioritises shareholder value and, put simply, BP gets more oil (and profit) per dollar invested in its giant fields in the USA, Azerbaijan and Iraq.
But the political angle can’t be dismissed, either. Theories abound as to the drivers behind BP’s departure, from Miliband’s exploration ban to the punitive Energy Profits Levy. And, even after all these years, it’s still not too late to blame for opponents to blame Thatcher.
So, is this the end of the North Sea as we know it – and are there wider lessons to be learned? It begs the question – what have BP done for us?
The BP story is a lengthy yarn dating back to its Anglo-Persian days at the turn of the 20th century. But whilst Iran and its oil supply remain a thorny issue to this day, let us confine ourselves here to its UK operations.
BP made Britain’s first ever North Sea discovery, the 1965 West Sole gas field off Yorkshire. Resplendent in corporate green, the late Queen headed to Aberdeen to open the multi-billion barrel Forties oil field in 1975. Further North Sea discoveries followed (Bruce, ETAP, Magnus) whilst under serene Poole harbour, BP discretely developed Wytch Farm, Europe’s largest onshore oil field. More recently, BP has led the way in the harsh conditions of the Atlantic margin, west of Shetland (Schiehallion, Clair). Moving with the times (not always successfully) BP has also invested heavily in the energy transition, from solar farms to its electric vehicle charging network.
Although the sell-off is big news, BP has been exiting Britain for some time now. Forties was sold to the Apache Corporation over twenty years ago. Since then, the American independent has kept production buoyant, ploughing billions into drilling and infrastructure projects unlikely to have met BP’s tougher investment hurdles. The Sullom Voe terminal on Shetland, the Forties Pipeline System and even BP’s petro-chemicals business are now all under new ownership.
So, was BP’s exit inevitable?
BP are not unique in leaving the North Sea. Nowadays, a raft of smaller independents extract value from mature assets discarded by supermajors. American giant ConocoPhillips sold up to private-equity Chryasor (now Harbour Energy) in 2019. Others have consolidated their UK activities. Adura combines the Shell and Equinor portfolios, including the contentious Jackdaw and Rosebank discoveries. Italy’s ENI has diversified into Britain’s renewables and carbon capture markets. “Right assets, right hands” was a mantra of the offshore regulator, the OGA.
Whilst BP were always likely to seek out greener pastures, its departure might have been delayed. Its current portfolio consists of large fields (by North Sea standards) and relatively modern infrastructure. But with the Energy Profits Levy still in place, the offshore marginal tax rate remains an eye-watering 78 per cent. And whilst last year’s North Sea Future Plan creates wriggle room for localised ‘tieback’ drilling, the ban on future exploration doesn’t leave the sector anywhere to go. Even lean-and-mean Apache are finally throwing in the towel at Forties.
Opponents contend that the problems really began when Thatcher sold Britain’s oil off. As ever, the reality is more nuanced. Tony Benn’s vision of an offshore British Leyland was mostly thwarted long before 1979.
BP fended off full nationalisation in the seventies, even citing a 1914 letter promising no government interference in Anglo-Persian. Joining the EEC prevented Benn’s own creation BNOC (later Britoil) from acquiring controlling stakes in licences. In the end, Dennis Healey, seeking an IMF bailout, sold off millions in BP shares just to keep Britain afloat.
Then there are the engineering realities. West Sole took barely 18 months to enter production despite a tragic accident soon after its discovery. Bringing Forties on stream in five years required a billion-pound investment in barely-proven offshore technology. At a time of economic challenges and industrial strife, a state-owned enterprise would have struggled to match that delivery. (For context, this was the same period when the British government was propping up a strike-prone car industry and ‘investing’ taxpayer funds in the new Morris Marina.)
Despite global evidence of National Oil Company (NOC) under-performance, proponents of state ownership focus on Norway’s Equinor, formerly Statoil. But whilst highly successful, the Norwegian sector is far from a nationalised idyll: multi-national giants (including BP) have invested there from day one. Even Equinor itself is partially privatized. And, of course, Norwegian oil is traded on global markets.
Instead, the learnings from our Scandinavian neighbours are quite different. There, public and private enterprise have successfully co-existed for years: perhaps a lesson for us in other sectors. And Norway’s offshore tax regime, whilst high, has been historically stable, compared to the endless meddling by UK chancellors which eroded investor confidence.
That long-term vision has translated into energy security, allowing Norway to export its hydrocarbons whilst meeting its own needs from domestic renewables. By contrast, Britain allowed its only major gas storage facility, Rough, to close in 2017, a move that back-fired as soon as Russian tanks rolled into Ukraine. And the former BP refinery at Grangemouth shut in 2025 leaving the UK with just four refineries, insufficient to meet national requirements.
Until recently, the proposed buyer of BP’s UK assets was the fast-growing Ithaca Energy. Expect further headlines if negotiations re-start: Ithaca’s portfolio includes the stalled Cambo field plus a stake in Rosebank. And its largest shareholder, Delek Group, is based in Tel Aviv of all places.
Controversy awaits. Not that Mrs. T would have minded.