Sunak’s North Sea drilling plan is purely ‘symbolic’, says former BP chief

Jonathan Leake
Sat, 9 December 2023 

Rishi Sunak’s planned expansion was little more than a political gesture, says Lord Browne - Simon Dawson/Bloomberg

Former BP chief Lord Browne has said Rishi Sunak’s decision to expand North Sea drilling is “not going to make any difference” to Britain’s energy security and is “symbolic”.

Lord Browne, who is now among Rishi Sunak’s lead scientific advisors, said he was “surprised” by the Prime Minister’s decision to grant new licences to drill in the North Sea annually.

Speaking in Dubai, where he has been attending the Cop28 climate talks, Lord Browne declared that the UK continental shelf was dying as an oil and gas resource and suggested Mr Sunak’s planned expansion was little more than a political gesture.

He told The Telegraph: “I’ve always thought that most of the North Sea and [the Atlantic] West of Shetland is at the end of its exploration life. So I was quite surprised at this plan. It’s a bit more symbolic, I think, than real.

“Someone wants to make a point that there’s freedom of choice here. It’s not going to make any difference in terms of the volumes found, and even in carbon dioxide produced if it’s used.”

North Sea drillers face not just dwindling supplies, but also a deeply unstable political environment. The last two years alone have seen offshore taxes raised from 40pc to 75pc, with Labour promising more to come should it win the coming election.

Lord Browne suggested that the UK’s offshore operators are now just planning to make as much money as they can and then quit.

“This is not an industry that is going to invest the same amount of money every year… People recognize that when governments become unreliable, that will stem the investment.

“And if there is nothing left to do [no remaining oil and gas], then people will naturally say fine – now we’re in the endgame. Let’s just take as much money as we can.”

Industry disagrees, with Mike Tholen of Offshore Energies UK suggesting the North Sea is the “foundation of energy security” and the platform on which to build a renewable sector.

However, Lord Browne’s comments carry weight given his reputation as arguably BP’s more influential former chief executive.

They are even more striking given Lord Browne’s current role as chair of the Government’s Council for Science and Technology – a group of the UK’s most senior scientists appointed to advise Rishi Sunak. On this issue, however, they appear not to have been consulted.

Lord Browne led BP between 1995 and 2007 during a period of fossil fuel expansion so successful that he became known as the industry’s “sun king”. However, the 75-year-old no longer regards himself as an “oil and gas man”, instead arguing he is now focused on investing in green energy.

“I stepped down as chief executive of BP in 2007. But even while I was with BP, I was trying to say, actually, energy is changing.

“I’ve been migrating, I would say, over the last 16 years, into an investor that invests in climate change. I don’t feel like an oil and gas person.”

That declaration may surprise his former colleagues, many of whom remain at BP.

Lord Browne’s links with oil and gas go back to his childhood when his father was an executive at Anglo-Persian Oil, now BP, and the family lived in Iran. His book, Beyond Business, describes how seeing a giant fire raging after a 1958 oil well blowout is what inspired him to enter the industry.

In 1966, as a graduate physicist, the then John Browne followed his father to BP, taking on exploration and production roles all over the world before eventually running BP’s exploration division.

He has overseen the discovery and extraction of billions of barrels of oil and gas – but that, he says, is now all over.

“We have to do something about climate change.”

His Damascene conversion began at BP with a controversial attempt to rebrand the company as “Beyond Petroleum”. BP managers tend to get embarrassed about the rebrand now but the underlying aim – of evolving the company for a post-fossil fuel era – has survived multiple leadership changes.

Lord Browne said this is because the science on climate change has become ever more convincing.

“We are dealing with something which is most likely to be an existential threat for humanity. Unless we alter our path, the world’s temperature by 2100 will be 3C higher than today.

“It changes where people can live, where you can grow crops, and living conditions for so many people, probably in a fatal way. The obvious answer is to stop putting greenhouse gases into the atmosphere.”

So far, there is zero sign of that happening. Annual global greenhouse gas emissions have risen from the equivalent of 33 billion tonnes of CO2 in 1990 – the Cop conference’s benchmark year – to 54 billion tonnes last year with no sign of a decline.

Some see the UN’s annual conferences as simply creating the pretence of action where none exists to soothe an increasingly concerned public.

The conferences are now huge – Lord Browne is among 70,000 people attending the Dubai meeting. Leaks to the BBC included claims that UAE officials planned to use the conference as an opportunity to strike oil and gas deals.

If Cop really is about tackling fossil fuel emissions, won’t future generations see it as the UN’s greatest failure?

Lord Browne counters: “It’s easy to say these UN Cop conferences are just useless talking shops… but some of them do achieve something. I think the one in Paris did achieve something by setting targets for nations. Whether we reach the targets is a different question.”

The Paris talks in 2015 saw 196 countries sign up to a legally binding agreement to limit global warming to no more than 2C, with the ambition of keeping it below 1.5C. In practice, it would mean greenhouse gas emissions peaking by 2025 at the latest and declining 43pc by 2030. There is no sign of either target being reached.

Oil and gas companies including BP that have sought to focus more on renewable energy have subsequently shifted back to oil and gas.

Lord Browne admits the dilemma. “These publicly listed companies have shareholders who look at the returns available right now. They are doing exactly what the signals from the investors are leaving them to do, which is to maximise returns based on their skills.”

Oil and gas companies are always likely to choose pleasing investors over saving the planet, he believes, so it is down to governments to create the rules and incentives to cut emissions. They are doing spectacularly badly, he thinks.

“I think the world has failed. I wouldn’t blame the Cop talks – they are just a set of meetings, a conference. But the world has failed because it has not figured out the right incentives to persuade people to reduce greenhouse gases.”

Lord Browne left BP in 2007 after making false statements to a UK court after a British tabloid “outed” him as gay. Lord Browne has called the incident a “such a bad error of judgment”.

However, all these years later the people and policies he brought in are still guiding the company today.

Tony Hayward, who was mentored by Lord Browne as his successor, had his tenure ended early by the 2010 Deepwater Horizon disaster. Next was Bob Dudley, another executive promoted by Lord Browne.

Mr Dudley stepped down in 2020 and was replaced by Bernard Looney, another of Lord Browne’s favourites. He was forced out after failing to reveal details of his relationships with multiple colleagues. Interim chief executive, Murray Auchincloss, was also a Lord Browne protege.

What’s striking is that all four have broadly followed the “beyond petroleum” path laid out by Lord Browne two decades ago.

What advice does he have for BP now? “I think they need to recognize that there are many voices out there, and that they need to not be arrogant.

“Companies don’t have a right to exist. They only exist when people buy their product. They should be mindful of that and respect what people say, meaning moving with regulation, reducing CO2 releases, and being part of society.

“It would be really wrong for a company to say ‘We’re here, you need us and there’s nothing you can do about it’. That’s just not true in the end, customers will go elsewhere.”