The North Sea oil and gas industry is calling on the UK government to terminate the windfall tax on fossil fuel companies by 2027, three years earlier than planned. Offshore Energies UK (OEUK), representing the sector, argues that this adjustment could boost investment in the region.
OEUK proposes replacing the current Energy Profits Levy with a tax structure that would apply only during periods of elevated oil and gas prices. This levy, initially introduced in 2022 following Russia’s invasion of Ukraine, imposes a 35% tax on revenue when energy prices soar. David Whitehouse, OEUK’s chief executive, suggests that maintaining high taxation during such times while fostering investment incentives is a key objective of the proposed changes.
The trade body believes that advancing the end date of the windfall tax could unlock up to £50 billion in North Sea investments, potentially supporting numerous jobs in the industry. Additionally, OEUK projects that this move could contribute approximately £14.9 billion in tax revenue over the next decade, factoring in the economic activity generated by new investments.
In a bid to enhance domestic energy production, the organization is also pressing for the approval of the Rosebank and Jackdaw oil and gas projects, which, they argue, could reduce the UK’s dependence on imported natural gas. However, this proposal faces opposition from environmental groups such as Greenpeace. These groups advocate strengthening the windfall tax instead, emphasizing that oil and gas companies should provide more financial support to households burdened by high living costs and energy prices.