UK Forecast Includes 1.2 Billion Barrels of Oil Equivalent From New North Sea Fields
Key Facts
The UK Office for Budget Responsibility’s forecasts included production from new North Sea fields, including Rosebank and future discoveries, in its production and revenue estimates published on 28 October 2026 alongside the budget. City A.M. estimated the potential resources included in this calculation at about 1.2 billion barrels of oil equivalent. But including these volumes in the forecasts does not mean the government has approved Rosebank or all the assumed projects. The OBR said oil and gas production could decline at an annual rate of about 14% if production from new fields does not begin. The estimate puts the outlook for domestic production at the center of debate over budget assumptions and licensing decisions.
The Treasury said, according to City A.M., that Rosebank had been included in government forecasts since at least 2019, and that its inclusion in revenue estimates was separate from the energy secretary’s independent decision on the project. As of 29 October, no decision on Rosebank had been issued; a memo to the energy secretary’s aides said she was the final decision-maker and would consider relevant factors as part of a quasi-judicial process. The Guardian quoted the memo as saying: "No decision has been made on Rosebank." This separates a fiscal assumption based on potential production from actual permission to develop the field. The forecasts therefore do not confirm that the volumes they include will translate into production or realized revenue.
Actual revenue figures point to a decline in tax receipts from the sector in the latest financial year. UK net tax revenues from oil and gas production totaled 4.3 billion pounds sterling in the 2025-2026 financial year, compared with 4.5 billion in 2024-2025, a 3% decline, according to data from HM Revenue and Customs. The figures come as budget forecasts factor new field production into their future calculations, without approvals for all those projects having been settled. The government has also linked the continued presence of oil and gas in the UK energy mix for decades to the sector’s stability, jobs and economic contribution. This reflects the parallel between revenue dependence on a sector whose output is declining and the bet on new production, while Rosebank remains subject to a separate decision.
The Jackdaw field provides an example of a project that has received government approval and of the impact authorities expect from domestic production. The Department for Energy Security and Net Zero said gas production from the field could raise domestic output by about 6% at peak and support supplies for up to 11 years. The department estimated that the project would add 2.9 billion pounds sterling to the UK economy and that its lifetime output would be equivalent to about 40 million barrels of oil in energy terms. These estimates for Jackdaw differ from Rosebank’s case, for which an approval decision had not been issued as of 29 October. Jackdaw was expected to begin supplying gas to UK homes and businesses as soon as the end of October 2026.
On financing the energy transition, the government announced an Energy Wealth Fund with an initial investment of 2 billion pounds sterling, linking it to future North Sea revenues to finance renewable and low-carbon energy investments. The budget also includes legislation for a new permanent tax on high oil and gas revenues, to replace the Energy Profits Levy when it expires. Under the baseline timetable, the new tax starts on 1 April 2030, or earlier if the price-threshold condition is met. HM Revenue and Customs said the tax would be 35% on the portion of oil or gas sales revenue above specified thresholds during periods of high prices. The fiscal approach thus combines reliance on sector revenues with funding for low-carbon energy investment, while the tax date remains tied to the expiry timetable for the current levy or the price condition being met.