The North Sea oil and gas industry is pressing the UK government to conclude the windfall tax on fossil fuel companies by 2027, three years earlier than planned, to stimulate investment in the sector. Offshore Energies UK (OEUK), the industry’s trade body, has advocated for the replacement of the current Energy Profits Levy with a more targeted tax, applicable only when oil and gas prices exceed a certain threshold.
Introduced in 2022 following a surge in energy prices due to Russia’s invasion of Ukraine, the Energy Profits Levy mandates a 35% levy on revenues during high price periods. OEUK Chief Executive David Whitehouse argues that their proposed system would still ensure increased taxation when prices are high but would also create more investment incentives.
OEUK projects that accelerating the tax change could attract up to £50 billion in new investments in the North Sea and support industrial jobs. The organization estimates that this could also lead to an additional £14.9 billion in tax revenue over the next decade, including revenue from jobs generated by fresh investments.
The industry group is also advocating for the approval of the Rosebank and Jackdaw oil and gas projects, asserting that boosting domestic production could lessen the UK’s dependency on imported natural gas. However, environmental groups, including Greenpeace, have countered this viewpoint, suggesting that the government should instead strengthen the windfall tax to ensure that oil and gas companies contribute more towards alleviating high living costs and energy prices for households.
