TRW & Co · Energy, Infrastructure & Transport
Oil and Gas Lawyers in London
Oil and gas lawyers London operators, investors and lenders instruct advise on UK Continental Shelf licences, deals, joint ventures, decommissioning and LNG contracts. With no new exploration licences, a windfall levy running to 2030 and scope 3 emissions now central to consents, the legal risks in North Sea assets have shifted sharply.
Key pointSince Finch and the Rosebank and Jackdaw ruling, the environmental statement for a new development has become a key value driver: buyers and lenders should diligence downstream scope 3 assessment as closely as reserves.
At a glance
No new exploration licences
The November 2025 North Sea Future Plan rules out licences to explore new fields but proposes Transitional Energy Certificates for production linked to existing fields.
Levy runs to 2030
The 38% Energy Profits Levy, giving a 78% headline rate, continues until March 2030 before a permanent price-based mechanism replaces it.
Scope 3 in consents
Following R (Finch) v Surrey County Council [2024] UKSC 20, offshore environmental statements must assess emissions from burning the oil and gas produced.
Decommissioning reach
Under Part IV of the Petroleum Act 1998, section 29 notices can require several connected parties to submit abandonment programmes, so liability can outlive a sale.
Licence trades continue
Government policy does not block licence term extensions or assignments of existing licence interests, so the market for mature assets remains open.
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What oil and gas lawyers London clients need: the scope of UK oil and gas law
Oil and gas lawyers London operators, investors, lenders and contractors instruct work across the upstream, midstream and trading value chain: licences and field development on the UK Continental Shelf (UKCS), joint ventures between licensees, asset and corporate deals, pipelines and infrastructure access, decommissioning, LNG and gas supply contracts, and the disputes that arise from all of them.
The sector is in a managed transition. Government policy now rules out licences to explore new fields, while supporting production from existing fields for their lifespan. That makes the legal questions less about frontier exploration and more about consents for developments already licensed, the transfer of mature assets, fiscal exposure and decommissioning liability.
TRW & Co advises independent producers, investors and private capital, service and supply-chain companies, traders and buyers of LNG and gas, and Bangladeshi and international energy businesses with UK-law contracts. This page sits within our wider energy practice.
The legal and regulatory framework
Offshore oil and gas regulation is reserved to the UK government, even though most production lies off Scotland. Onshore licensing and planning are partly devolved, so this page focuses on the offshore regime. Oil and gas lawyers London clients use should confirm which regulator controls each decision.
Primary legislation
- The Petroleum Act 1998 vests petroleum in the Crown, provides for production licences, and in Part IV governs decommissioning. Under section 29 the Secretary of State may serve written notice requiring persons to submit an abandonment programme for an offshore installation or pipeline.
- The Energy Act 2016 established the regulator now known as the North Sea Transition Authority (NSTA) as an independent body with sanctioning powers.
- The Offshore Oil and Gas Exploration, Production, Unloading and Storage (Environmental Impact Assessment) Regulations 2020 require environmental assessment and ministerial agreement before a field development can proceed.
- Taxation sits in ring fence corporation tax, the supplementary charge and the Energy Profits Levy, with petroleum revenue tax still relevant to older fields.
Regulators
| Body | Role | When you deal with it |
|---|---|---|
| North Sea Transition Authority (NSTA) | Licensing, stewardship, field development plan consents, licence assignments and change of control, decommissioning cost oversight | Acquiring or selling licence interests, developing a field, extending licence terms |
| Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) | Part of the Department for Energy Security and Net Zero; environmental regulation and decommissioning programmes | Environmental statements, permits, section 29 notices and abandonment programmes |
| Health and Safety Executive | Offshore safety regulator, jointly with OPRED as the Offshore Safety Directive Regulator | Safety cases, well notifications, major accident hazards |
| HM Revenue & Customs | Ring fence corporation tax, supplementary charge and Energy Profits Levy | Fiscal modelling, tax on asset deals, decommissioning relief |
| The Crown Estate and Crown Estate Scotland | Seabed rights for pipelines, cables and carbon storage | Infrastructure and co-location with wind and carbon storage |
The 2026 policy landscape: licensing, tax and climate litigation
No new exploration licences, but production near existing fields
On 26 November 2025 the government published its North Sea Future Plan. It confirmed that no new licences will be issued to explore new fields, but announced Transitional Energy Certificates to allow limited additional production on or near existing fields, where it needs no new exploration and links back to existing fields and infrastructure. The NSTA has said legislation is expected to give this long-term clarity.
The policy does not prevent extensions to the term of existing licences or the assignment of licence interests between companies. That keeps the M&A market for mature assets open, and oil and gas lawyers London buyers and sellers rely on now spend much of their time on licence extensions, consents to assignment and late-life economics.
The Energy Profits Levy and its successor
The Energy Profits Levy is a 38% charge on top of ring fence taxes, taking the headline rate to 78%. The government confirmed in November 2025 that it will continue until March 2030 unless prices fall below a floor mechanism sooner. It is due to be replaced by a permanent, revenue-based Oil and Gas Price Mechanism that will apply only when oil and gas prices exceed set thresholds, with draft legislation to be consulted on. For any acquisition, the after-tax value of a field depends heavily on the timing and design of this transition.
Scope 3 emissions and judicial review
In R (Finch) v Surrey County Council [2024] UKSC 20, the Supreme Court held that the environmental impact assessment for an onshore oil project had to assess the emissions from burning the oil produced, known as downstream scope 3 emissions. In January 2025 the Court of Session in Scotland applied that reasoning to the offshore consents for the Rosebank and Jackdaw fields and held them unlawful, while allowing work to continue pending fresh decisions.
In June 2025 OPRED published supplementary guidance on assessing the effects of downstream scope 3 emissions from offshore projects. Developers now need an environmental statement that addresses end-use emissions, and decision-makers must engage with it. This has become a central consent and litigation risk.
On the UK Continental Shelf, the value of a field now turns as much on its environmental consent and fiscal regime as on its reserves.
Asset and corporate transactions
Most UK upstream deals are either sales of licence interests (asset deals) or sales of the companies that hold them (corporate deals). Each needs a different set of consents. Oil and gas lawyers London buyers appoint should plan for regulatory approvals from the start.
| Issue | Asset deal (licence interest) | Corporate deal (licensee shares) |
|---|---|---|
| Regulatory consent | NSTA consent to assignment of the licence interest | NSTA change of control process; licence may be revoked if control changes without approval |
| Joint venture rights | Pre-emption rights under the joint operating agreement often apply | Pre-emption usually does not apply unless the JOA has change of control provisions |
| Decommissioning | Seller may remain exposed to section 29 notices; decommissioning security agreements are key | Buyer inherits the company's full history and liability |
| Tax | Ring fence allowances and losses may not transfer as the buyer expects | Tax history and losses stay with the company, subject to anti-avoidance rules |
| Other clearances | NSIA if energy sector criteria are met; merger control | NSIA and merger control more likely to bite |
Typical sale process
- Preparation. The seller builds a data room covering licences, JOAs, field development plans, reserves reports, decommissioning estimates and security, and tax history.
- Early regulator engagement. The buyer's technical and financial capacity will be tested by the NSTA, so the parties engage early on the buyer's credentials and decommissioning security.
- Heads of terms and sale agreement. Negotiate price, effective date, interim period adjustments, contingent consideration linked to oil price or development milestones, and decommissioning allocation.
- Pre-emption. Notify co-venturers under the JOA and manage any exercise of pre-emption rights.
- Decommissioning security. Agree or amend the decommissioning security agreement, usually backed by letters of credit or trust arrangements, and any seller retained liability.
- Regulatory and other approvals. Obtain NSTA consent, any NSIA clearance and, where relevant, merger control approval.
- Completion and transfer. Execute the licence assignment deed, novate key contracts, and deliver completion statements adjusting for cash flows since the effective date.
Key contracts in UK oil and gas
- Joint operating agreement (JOA). Governs how co-licensees share costs, take decisions, appoint the operator, handle default and transfer interests. Default and forfeiture provisions are often decisive in distressed situations.
- Decommissioning security agreement. Sets how each licensee secures its share of future decommissioning costs, often through letters of credit, and when security levels are recalculated.
- Infrastructure and transportation agreements. Access to third-party pipelines and processing facilities, where tariffs and capacity rights shape field economics.
- Gas and crude sales agreements, including LNG sale and purchase agreements, with price review, take-or-pay and force majeure clauses.
- Drilling, construction and services contracts, typically using knock-for-knock indemnities that allocate personal injury and property damage by party rather than fault.
- Financing documents, including reserve-based lending facilities whose borrowing base is linked to field value.
A seller of a UKCS interest can remain exposed to decommissioning liability long after completion, because the Secretary of State can serve section 29 notices on former licensees in some circumstances. Price that residual risk, and secure the buyer's decommissioning obligations and an indemnity backed by credit support, rather than relying on the sale agreement alone.
Decommissioning and late-life assets
Decommissioning is a growing share of UKCS activity. Under Part IV of the Petroleum Act 1998, OPRED may require persons connected with an installation or pipeline to submit an abandonment programme, and those persons can be jointly liable. The NSTA also oversees decommissioning cost estimates and planning as part of its stewardship role.
Late-life deals often involve buyers taking on mature fields with large decommissioning liabilities. The key legal tools are decommissioning security agreements, retained liability provisions, and step-in or default arrangements if a co-venturer fails. Recent fiscal changes also matter: commentators note that new legislation prevents payments under decommissioning relief deeds in relation to the Energy Profits Levy, which affects the value of tax relief on decommissioning spend.
See OPRED's guidance on the decommissioning of offshore installations and pipelines for the official process.
Infrastructure, carbon storage and repurposing
As fields decline, the value of offshore infrastructure increasingly lies in what else it can do. Pipelines, platforms and depleted reservoirs can support tie-backs from nearby discoveries, electrification from offshore wind, or carbon dioxide transport and storage. The NSTA now licenses carbon storage alongside oil and gas, and the Energy Act 2023 created licensing for carbon dioxide transport and storage networks.
Repurposing raises distinct legal questions. Who owns and is liable for infrastructure that moves from a petroleum regime to a carbon storage regime? How are decommissioning obligations deferred or transferred, and who bears them if the new use fails? How are access rights, tariffs and capacity shared between legacy oil and gas users and new carbon storage customers?
Oil and gas lawyers London owners and investors work with should look at these options before committing to a decommissioning programme, because a premature removal plan can destroy optional value. Equally, a buyer taking on infrastructure for reuse should not assume regulators will release the original licensees from their obligations. Our guide to hydrogen and CCUS business models explains the revenue support contracts for carbon capture projects.
Risks and common mistakes
Assuming a field development consent is safe from challenge
After Finch and the Rosebank and Jackdaw ruling, consents for new developments face a real risk of judicial review if the environmental statement does not properly assess downstream scope 3 emissions. A successful challenge can leave a project partly built while a fresh decision is taken. Buyers and lenders should review the environmental statement against OPRED's June 2025 guidance, check any challenge periods and litigation, and allocate consent risk in sale and finance documents through conditions, deferred consideration or specific indemnities.
Under-estimating decommissioning exposure
Decommissioning estimates can rise sharply, and liability can reach former owners and parent companies. Sellers sometimes assume a sale ends their exposure; buyers sometimes rely on outdated cost estimates. Commission an independent review of estimates, map who could receive a section 29 notice, and agree robust security and indemnities. Check whether parent company guarantees given to co-venturers or the government survive a sale.
Missing JOA pre-emption and default rights
Joint operating agreements often give co-venturers pre-emption rights on transfers and harsh remedies against a defaulting party, including forfeiture of its interest. A buyer that does not price pre-emption risk may lose the deal late, and a licensee that misses a cash call may lose its interest. Review every JOA early, model the effect of a co-venturer's default, and negotiate waivers where a deal structure needs them.
Mis-modelling the fiscal transition
Ring fence taxes, the Energy Profits Levy and the incoming Oil and Gas Price Mechanism interact with investment allowances, losses and decommissioning relief. Deal models that assume early repeal or ignore the price-based successor regime can misprice an asset. Ensure tax advisers model the current law and announced changes separately, and use price adjustment or contingent consideration mechanisms to share fiscal uncertainty between buyer and seller. Our tax team works on these questions.
Ignoring NSIA and sanctions
Energy is a sensitive sector under the National Security and Investment Act 2021, and some acquisitions of control over qualifying energy entities need mandatory clearance before completion. Oil and gas trading and services also carry significant sanctions exposure, particularly in relation to Russian-origin oil and related services. Build NSIA analysis and sanctions diligence into the deal timetable. Our sanctions and export controls team advises on these issues.
Cross-border oil, gas and LNG: Bangladesh, the Gulf and Asia
English law is widely used for international crude, LNG and gas contracts, and London-seated arbitration is a common forum for energy disputes. Oil and gas lawyers London clients appoint on cross-border matters must consider the host state's law alongside the English-law contracts.
- Bangladesh. Bangladesh's upstream sector operates through production sharing contracts with the state energy company Petrobangla, and the country imports LNG under long-term and spot contracts. TRW & Co's Dhaka and Chattogram offices advise on Bangladeshi law while the London team advises on English-law supply, finance and arbitration documents.
- The Gulf. Gulf national oil companies and investors are significant LNG sellers and investors in UK and international assets. Governing law, price review and dispute resolution clauses in long-term LNG contracts deserve particular care.
- Singapore and China. Singapore is a key trading hub, and Asian buyers and traders often contract under English law. Enforcement planning should consider where the counterparty's assets are located.
- Arbitration. Many energy contracts choose LCIA or ICC arbitration seated in London. The Arbitration Act 2025 amended the framework; see our international arbitration page and our guide to enforcing a London award in Bangladesh.
How TRW & Co helps
We act as oil and gas lawyers London operators and investors can bring in for transactions, contracts and disputes. We give no outcome guarantees, and where advocacy in the higher courts is required, we instruct specialist counsel.
Upstream M&A
Asset and corporate acquisitions and disposals of UKCS interests, including NSTA consents, pre-emption, decommissioning security and contingent consideration. We work with our M&A team on corporate deals.
Joint ventures and JOAs
Drafting and negotiating joint operating agreements, farm-ins and unitisation arrangements, and advising on default, forfeiture and operator changes.
Decommissioning
Decommissioning security agreements, retained liability provisions and the allocation of section 29 exposure between buyers, sellers and co-venturers.
Gas and LNG contracts
Gas sales, LNG sale and purchase agreements, transportation and processing agreements, with focus on price review, take-or-pay and force majeure.
Finance
Reserve-based lending, acquisition finance and security over licence interests, alongside our project finance lawyers.
Disputes
JOA and decommissioning disputes, contractor claims, price reviews and LNG disputes in the English courts and international arbitration.
To discuss a matter, contact our London office at Holborn Gate, 330 High Holborn, London WC1V 7QH, email info@trw.co, or explore all our practices, including carbon markets for carbon capture and storage linked to former fields.
Checklist for decision-makers
- Does the asset fall within current licensing policy, and does it need a licence extension or a Transitional Energy Certificate?
- Has the environmental statement assessed downstream scope 3 emissions in line with OPRED's guidance?
- Have you modelled the Energy Profits Levy to March 2030 and the successor price mechanism?
- Which consents apply: NSTA assignment or change of control, NSIA, merger control?
- Have JOA pre-emption, default and change of control provisions been reviewed?
- Are decommissioning estimates current, and is security and retained liability allocated clearly?
- Are sanctions and trade controls covered in diligence and contract terms?
- Do dispute resolution clauses align across the JOA, sale agreement and offtake contracts?
- Have you taken advice from oil and gas lawyers London investors trust on any foreign law issues?
Frequently asked questions
01Can new oil and gas licences still be granted in the UK?
Not for exploring new fields. The North Sea Future Plan published on 26 November 2025 confirmed the government will not issue licences to explore new fields. It proposed Transitional Energy Certificates to allow limited production on or near existing fields where no new exploration is needed and the production links back to existing fields and infrastructure. The NSTA has said legislation is expected to give this long-term effect. Existing licences can still be extended and assigned, subject to the usual NSTA consents.
02What does the Finch judgment mean for offshore projects?
In R (Finch) v Surrey County Council [2024] UKSC 20, the Supreme Court held that an environmental impact assessment for an oil extraction project must assess the emissions from burning the oil produced. The Court of Session applied similar reasoning in January 2025 to the consents for the Rosebank and Jackdaw offshore fields, which were held unlawful and had to be redetermined. OPRED published supplementary guidance in June 2025 on assessing downstream scope 3 emissions. New developments must therefore address end-use emissions in their environmental statements.
03How long will the Energy Profits Levy last?
The government has said the Energy Profits Levy will continue until March 2030, or earlier if prices fall below thresholds set by its floor mechanism. The levy is charged at 38% on top of ring fence corporation tax and the supplementary charge, giving a headline rate of 78%. It is due to be replaced by a permanent, revenue-based Oil and Gas Price Mechanism that will apply only when prices are high. The detailed legislation for that mechanism is still to be finalised, so deal models should treat it with caution.
04Does selling my licence interest end my decommissioning liability?
Not necessarily. Under Part IV of the Petroleum Act 1998, the Secretary of State can serve notices requiring connected persons to submit an abandonment programme, and in some circumstances former licensees and their associates can be pursued. That is why sale agreements usually include decommissioning security, retained liability provisions and indemnities backed by credit support. Sellers should take advice on residual exposure before agreeing a price, and buyers should expect to post security.
05What consents are needed to buy a stake in a North Sea field?
An asset deal requires NSTA consent to the assignment of the licence interest. A corporate acquisition of a licensee triggers the NSTA's change of control process, and failing to obtain approval can put the licence at risk. Co-venturers may hold pre-emption rights under the joint operating agreement. Depending on the buyer and target, mandatory clearance under the National Security and Investment Act 2021 and merger control approval may also be needed before completion.
06Why are LNG contracts often governed by English law?
English law is widely used in international energy trading because it offers commercial certainty, respects freedom of contract and has an experienced commercial court and arbitration community in London. Long-term LNG contracts commonly provide for London-seated arbitration under LCIA or ICC rules. The key provisions to negotiate are price review, take-or-pay, force majeure, cargo scheduling and termination. Parties should also plan how an award would be enforced where the counterparty's assets sit.
07Can TRW & Co help Bangladeshi energy businesses?
Yes. Our London office is authorised and regulated by the Solicitors Regulation Authority and advises on English-law contracts, finance and arbitration, while our offices in Dhaka and Chattogram advise on Bangladeshi law. That combination suits LNG and gas supply contracts, upstream arrangements with Petrobangla, investments by Bangladeshi groups in UK energy businesses, and enforcement of London arbitration awards in Bangladesh. Where higher court advocacy is needed in England, we instruct specialist counsel.
Sources and official materials
- Petroleum Act 1998 — Licensing and Part IV decommissioning
- North Sea Future Plan announcement — November 2025 licensing policy and Transitional Energy Certificates
- North Sea Transition Authority — Offshore oil, gas and carbon storage regulator
- Offshore Petroleum Regulator for Environment and Decommissioning — Environmental and decommissioning regulator
- Oil and gas: offshore environmental legislation — EIA regulations and scope 3 guidance
- R (Finch) v Surrey County Council [2024] UKSC 20 — Supreme Court ruling on scope 3 emissions
- Decommissioning of offshore installations and pipelines — OPRED decommissioning guidance
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.