Conservatives Blame Labour for Petrofac Administration as North Sea Pressures Intensify
The collapse of Petrofac into administration has reignited the political debate over the future of the UK’s North Sea energy sector. The Conservative Party has accused the Labour Government of fostering what it calls a “hostile environment” for oil and gas operators, contributing to a decline in investment and confidence across the region.
Andrew Bowie, the shadow Scottish secretary, argued that Petrofac’s difficulties are symptomatic of broader policy shifts since the 2024 general election.
“Another week, another hammer blow to our North Sea oil and gas industry,” Bowie said. “Petrofac’s move into administration places the futures of around 2,000 employees in Scotland at risk—along with many more in the wider supply chain. While the company has faced challenges for some time, the Government’s approach to the UK continental shelf has made conditions increasingly unworkable.”
Petrofac, which has its global headquarters in Aberdeen, has been a significant contractor in both traditional energy and energy transition projects. Its administration comes amid layoffs and restructuring across multiple North Sea operators.
Bowie claimed the current landscape reflects not market forces but what he calls a “manufactured decline.”
“The ‘closed for business’ sign is effectively hanging over the North Sea. The extension and increase of the energy profits levy, restrictions on new licensing, and uncertainty around projects such as Rosebank and Jackdaw are undermining investor confidence,” he added.
Critics argue that without stable regulatory support, the sector risks losing not only jobs and tax revenues, but also the domestic production capacity needed to underpin the UK’s long-term energy security during the transition to lower-carbon sources.
Meanwhile, Labour maintains that its approach is designed to accelerate the shift toward renewable energy and reduce the UK’s reliance on fossil fuels—while critics counter that abrupt policy changes are destabilising a sector already under pressure.
Petrofac’s administration will now test how resilient the North Sea supply chain remains after years of volatility, and whether policymakers can balance climate strategy with economic and energy security priorities.
