Prime Minister urged to drop ban on oil and gas drilling as BP puts North Sea business up for sale

By CLAIRE ELLIOT, SCOTTISH GENERAL NEWS REPORTER Published: 19:20, 31 July 2026 | Updated: 19:20, 31 July 2026 Andy Burnham has been urged to drop Labour’s ban on new oil and gas drilling ‘before it’s too late’ after BP put its North Sea operation up for sale. Ending its 60 years of production in UK waters, the oil giant said the division, which employs 1,100 people, would be ‘better positioned as part of another company’. Business leaders warned BP’s exit showed the UK oil and gas industry is ‘at a crossroads’. Aberdeen & Grampian Chamber of Commerce (AGCC) blamed ‘years of policy uncertainty, punitive taxation and mixed messages’ from Government for the blow. Conservative leader Kemi Badenoch said: ‘Andy Burnham must stop faffing about and allow new oil and gas licences before it’s too late.’ It has been claimed that Labour and SNP hostility to new drilling and a 78 per cent windfall tax on energy company profits are widely seen as scaring off investors and driving 1,000 job losses a month. Brian Gilvary, a former BP finance chief who now chairs rival INEOS Energy, said the punitive charge, coupled with the ban on drilling, ‘has effectively shut down investment’. Kemi Badenoch on a visit to the Well-Safe Protector rig at Aberdeen's South Harbour The Prime Minister this week promised a ‘pragmatic approach’ and said resources offshore ‘can’t be ignored’, but details remain scant. In a key test for the Burnham regime, energy secretary Miatta Fahnbulleh will have to decide within weeks whether to approve the Rosebank oil and Jackdaw gas fields. BP, which has operated in the North Sea in 1964, was synonymous with UK oil and gas. Its discovery of the colossal Forties field 110 miles north east of Aberdeen in the 1970s was a game-changing moment for the entire UK economy. Last year its three production hubs west of Shetland and two in the central North Sea yielded barely five per cent of its total daily production of 2.3 million barrels of oil equivalent. Ms O’Neill said the FTSE 100 titan had to focus on its ‘highest-value opportunities’. It comes just two months after reports that BP had been close to selling the North Sea unit to smaller rival Ithaca Energy for £2bn, but the deal fell apparently through. After meeting BP representatives yesterday, Aberdeen South Tory MP Douglas Lumsden said: ‘This should come as a dire warning for the Labour government who must urgently change course. ‘Labour’s decision to increase and extend the windfall tax on oil and gas companies was obviously a major factor in BP’s decision.’ First Minister John Swinney said the announcement meant ‘a time of real uncertainty for workers’ He said: ‘Westminster’s supertax on jobs is hurting Scotland, especially the north east. The UK Government must scrap the Energy Profits Levy and urgently act to protect jobs.’ AGCC chief executive Russell Borthwick said the announcement should be a ‘defining moment’ for the new PM. He added: ‘How many more jobs need to be lost before the UK Government acts? ‘BP’s decision should not be viewed in isolation. It is the latest signal that the UK is at a crossroads. A BP platform in the North Sea's Clair Ridge field  ‘The new Prime Minister has a genuine opportunity to reset the relationship with our offshore energy sector and restore confidence before more investment is lost.’ David Whitehouse, CEO of Offshore Energies UK, said BP’s decision was a ‘significant moment’ and ‘should prompt serious reflection’. Writing in today’s Mail, he added: ‘BP’s departure should not be read as a eulogy for the North Sea, but as a warning - and a call to arms - for the politicians who hold the pen on its next chapter. ‘The original tenant may be leaving. Whether the industry, the jobs and the communities depending on it stay or go too is still, for now, within the UK Government’s power to decide.’ Scottish Secretary Douglas Alexander said: ‘The UK Government is clear - North Sea oil is a vital national asset, oil and gas will very much be part of the energy mix of the country for years to come.’ His Tory shadow Andrew Bowie said: ‘BP has been drilling in British waters for six decades, but because of Labour’s disastrous Net Zero dogma it faces extinction. ‘Andy Burnham should break with the past and immediately approve the Jackdaw and Rosebank sites and cancel their plans to ban on new licences in the North Sea.’