UK immigration reforms: implications for the energy sector

The UK Government’s 2025 White Paper on Restoring Control over the Immigration System introduces a number of sweeping changes to immigration policy, aimed at reducing reliance on foreign labour and prioritising domestic workforce development. While the White Paper is politically resonant, it presents significant challenges to the UK’s energy sector, a critical industry that already faces acute skills shortages, an ageing workforce, and pressure to transition towards low-carbon energy.

Here we look at some of the key challenges facing the UK energy sector in light of the new immigration framework:

Talent Shortages in Critical Roles

The UK energy industry relies heavily on international talent, particularly in engineering, geosciences, subsea technologies, and other technical disciplines. The White Paper’s tighter controls on skilled immigration, especially the raised salary thresholds and reduced eligibility for intra-company transfers, could make it far harder to recruit:

• Offshore installation managers
• Petroleum and drilling engineers
• Subsea and pipeline specialists
• Digitalisation and AI experts (used in seismic data analysis and asset optimisation)

This could result in project delays, increased costs, and a deterioration in the UK’s attractiveness as a hub for energy investment.

Ageing Domestic Workforce

According to industry studies, a large portion of the UK’s energy workforce is nearing retirement. The White Paper does not propose short-term solutions for addressing this demographic cliff, instead leaning on longer-term investment in domestic training pipelines, which may take a decade to yield results. The disconnect between timing and demand creates immediate operational risk.

Threat to Energy Security and Net Zero Goals

The North Sea Transition Authority (NSTA) has encouraged continued extraction of domestic oil and gas to ensure energy security during the UK’s net-zero transition. However, reduced access to international talent could:

• Slow down critical maintenance and upgrades of offshore infrastructure;
• Hinder the timely rollout of carbon capture, utilisation and storage (CCUS) and hydrogen projects; and
• Limit the UK’s ability to remain competitive in the global energy supply chain.

Increased Costs and Regulatory Burden

The stricter visa regime will inevitably raise compliance costs, particularly for SMEs and specialist contractors. Many oil service companies rely on short-term foreign workers who operate on seasonal or project-based contracts. These firms will be disproportionately affected by the reduced availability of temporary work visas and more burdensome sponsorship requirements.

Competitiveness and Investment Risk

Major operators may reconsider future UK investments if staffing becomes too complex or uncertain. The UK could lose ground to countries with more flexible and targeted immigration frameworks, such as Norway, the UAE, or Canada. This is particularly important as the industry competes globally for a finite pool of high-skilled energy professionals.

Offshore Wind and Transition Projects Also Impacted

The White Paper’s restrictions do not only affect traditional oil and gas. Many companies involved in hydrocarbons are leading the offshore wind and renewable energy build-out. These clean energy initiatives also rely on foreign talent, especially in project management, marine engineering, and high-voltage electrical systems.

Conclusion

Unless adjustments are made, the 2025 immigration reforms may act as a drag on UK energy development at a time when the sector is tasked with delivering both economic resilience and environmental transformation. Industry groups such as OEUK (Offshore Energies UK) and the Energy Institute are likely to press the Government for:

• Exemptions or carve-outs for specific high-skill roles;
• A more responsive shortage occupation list;
• Streamlined pathways for essential energy workers; and
• Greater investment in UK training aligned with industrial needs.

The oil sector is resilient and adaptive, but without policy flexibility, the current trajectory risks undermining both energy security and economic growth.

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The information and opinions contained in this blog are for information only.  They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice.  Before acting on any information contained in this blog, please seek solicitor’s advice from Gilson Gray.