Andy Burnham is set to announce plans for new oil and gas drilling in the North Sea when he assumes the role of Prime Minister on Monday, according to the BBC. This move comes despite the Labour Party's 2024 manifesto, which pledged to refrain from issuing new licenses while honoring existing ones.
Key Details
The announcement will address two significant oil and gas fields in Scotland, Rosebank and Jackdaw, which received regulatory approval in 2022 and 2023 under the previous Conservative government. However, these approvals were overturned in 2025 following a legal challenge. Burnham's plans will be part of a broader agenda that includes proposals to bring water and energy companies under public control and initiate a new council house-building program.
Background
The North Sea drilling debate has been contentious. Sir Keir Starmer, the outgoing Labour leader, has faced criticism for his stance against new drilling, arguing that it does not guarantee lower consumer bills and emphasizing the need to transition to renewable energy sources. Conversely, the Conservative Party and Reform UK have pressured the government to increase drilling, citing rising energy prices exacerbated by the ongoing conflict in Iran. Starmer's energy policy has also drawn criticism from figures within his own party, highlighting divisions over the direction of Labour's energy strategy.
The announcement is likely to influence energy sector stocks, particularly those involved in oil and gas exploration and production. Increased drilling activity could lead to higher oil supply, potentially affecting global oil prices. Investors will watch for the government's next steps regarding energy policy and any potential regulatory changes following Burnham's announcement.