It Looks Like Europe is Pivoting to Drill for More Oil & Gas, Especially in Offshore Plays

    Faced with the loss of pipelined Russian gas supplies and the high cost of LNG, including U.S. LNG, and the high cost of gas for consumers, Europe seems to be pivoting toward drilling more wells, according to articles in Oil Price US and by Reuters BOE Report. Most of the drilling is likely to be in offshore plays.

     The EU is under a rather self-imposed drilling “ban,” or at least strong discouragement, by energy transition ambitions that many are now realizing are unrealistic in the near term. That, coupled with the loss of Russian gas and the high costs of LNG, is driving new projects. However, these projects won’t be available for consumption quickly, especially as offshore projects are notoriously slow to come online. The EU now imports 85% of its natural gas, up from about 50% in the 1990s. LNG imported from the U.S. now makes up 16.5% of the EU’s gas supply.

     The reports note that three countries in particular are now pondering new offshore exploration projects: Greece in the Ionian Sea, offshore Italy, and the UK in the North Sea. I might add that other EU offshore areas to consider include offshore Romania in the Black Sea, offshore Poland in the Baltic Sea, and near Cyprus in the Mediterranean. 

     In November, Greece issued its first offshore oil and gas exploration license, the Block 2 license, in over four decades to a consortium of Exxon Mobil, Energean, and Helleniq Energy. Greece also awarded Chevron and Helleniq exploration rights in blocks south of the Peloponnese peninsula. In the first block, as much as 200 billion cubic meters (7 TCF) of gas could be accessible. Drilling is expected to begin in late 2026 or in 2027. The country hopes to develop the offshore gas and export it to other EU countries to enhance their energy security.

“U.S. Energy Secretary Chris Wright, who attended the Block 2 award signing ceremony in Athens along with Interior Secretary Doug Burgum, said the development of the field would help Europe displace Russian energy.”

     In that context, it now appears even more unrealistic that the EU will buy $750 billion in U.S. fuel purchases over the next three years, as indicated in previous negotiations with the Trump administration.

     Italy is also considering reviving offshore oil and gas exploration, which was suspended in 2019, with Shell, the top producer in the country, saying it is ready to invest.

     In Britain, the government recently loosened its strict ban on new exploration activity in the North Sea to allow companies to expand production in existing fields, and is also expected to approve two major new fields in the coming months.

     Norway’s state oil company, Equinor, expects to drill 250 North Sea exploratory wells by 2050 to sustain production. Denmark still maintains restrictions on offshore exploratory drilling, and the Netherlands restricts all onshore exploration, likely due to induced seismicity issues.

     Poland had an exploration success earlier this year in the Baltic Sea, which I wrote about. It may be the biggest European success in the past decade.

     Reuters notes that realistically, the EU won’t reduce or delay its climate commitments too much overall, and they also won’t be able to boost domestic production that much. With depletion in some fields, it takes significant drilling just to maintain domestic production.  

     Oil Price US points to a Reuters article in October that referred to the renewables advocate IEEFA, noting that the U.S. would need to:

“…supply around 70% of Europe's LNG in 2026-2029, up from 58% so far this year, as the EU plans to ban Russian LNG from 2027 and Russian gas from 2028, Energy Aspects analysts said.”

     That article also notes that despite the increase in LNG imports, the continent still imports both pipelined gas and LNG from Russia, though that is expected to be discontinued. Pipeline imports from Algeria have also dropped, as well as from Russia. Some projections from S&P Global and IEEFA for EU gas supply are shown below.

     LNG exports are starting to increase from the U.S. as more liquefaction trains come online and more supporting infrastructure is built. Thus, there will be more cargoes available to the EU as well as to Asia.

 

  

 

References:

 

'Drill, baby, drill': Europe aims to reduce reliance on US LNG. Andrew Topf. Oil Price US. December 3, 2025. 'Drill, baby, drill': Europe aims to reduce reliance on US LNG

Europe’s drilling comeback challenges US energy pledges: Bousso. Reuters. BOE Report. December 1, 2025. Europe’s drilling comeback challenges US energy pledges: Bousso | BOE Report

European Union's US gas use set to soar, increasing price volatility. Nora Buli and Alban Kacher. Reuters. October 6, 2025. European Union's US gas use set to soar, increasing price volatility | Reuters