North Sea oil explorer to drill in Canada

By the Editorial Team · Tuesday, October 6, 2026

Ithaca Energy is acquiring three offshore assets in Canadian waters from Suncor Energy for £650 million, marking its first international expansion beyond the North Sea. This move reflects a strategic response to increased taxation and regulatory pressures in the UK, as the company seeks to diversify amid challenges facing the domestic oil and gas sector.

Ithaca Energy, a British oil and gas company headquartered in Aberdeen, is set to expand its operations into Canadian offshore waters with a £650 million investment. The firm plans to acquire three assets located off the coast of Newfoundland and Labrador from Canadian energy company Suncor Energy. This marks Ithaca's first move into international waters, reflecting a strategic shift away from the North Sea amid increasing regulatory and fiscal challenges in the United Kingdom.

The transaction comes as the UK oil and gas sector faces mounting pressures, including heightened taxation and growing opposition to new drilling activities. Currently, firms operating in the UK North Sea contend with a windfall tax rate of 78 percent on profits, a policy that has drawn criticism from industry leaders. Meg O’Neill, chief executive of BP, recently called on the British government to repeal this levy, emphasizing the detrimental impact it has on investment and production within the region.

Since the Labour Party assumed government control in the UK, the North Sea oil industry has experienced significant contraction, losing approximately 25,000 jobs according to a report by the North Sea Transition Taskforce. This decline underscores broader concerns about the sector’s sustainability under current fiscal regimes and the need for policy reforms to maintain production levels and employment.

Following the announcement of Ithaca’s acquisition, the company's shares rose by 2.2 percent to 281.4 pence, pushing gains for the year to around 70 percent. The deal aligns with a trend among UK-based energy firms diversifying assets internationally to mitigate domestic risks and capitalize on opportunities in more favorable regulatory environments.

This development also follows BP’s recent decision to put its North Sea operations up for sale, signaling potential shifts in the regional oil and gas landscape. Ithaca’s investment in Canadian offshore resources may serve as a bellwether for other companies evaluating their exposure to the UK Continental Shelf amid evolving economic and political dynamics.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.