The UK government has announced during its presentation of the budget that the windfall tax, introduced in 2022, would remain in place until 2030.<\/p>\n
Under the windfall tax, formally known as the Energy Profits Levy, operators are handing over 78% of their profits to the UK Treasury\u2014one of the highest rates in the world.<\/p>\n
According to the industry, the tax, introduced when Russia\u2019s invasion of Ukraine caused oil prices to spike sharply, is hurting the sector. The oil price dropped by half, to about $60 a barrel, and industry players claim that no profits can be made with such high taxes.<\/p>\n
Offshore Energies UK (OEUK), a trade association for the country\u2019s offshore energy industry, has condemned the government\u2019s decision to reject the replacement of the Energy Profits Levy in 2026.<\/p>\n
The association believes that this move will cost tens of thousands of jobs, cripple investment, and undermine Scotland and the UK\u2019s energy security.<\/p>\n
OEUK further stated that the next move will be to meet with its 450 member companies for urgent talks \u2013 including operators, contractors, and supply chain firms working across oil and gas, wind, hydrogen, and carbon capture projects \u2013 all critical to the UK\u2019s energy future.<\/p>\n
Together, they support the livelihoods of over 200,000 people whose jobs \u201cnow face growing risk as Britain turns to imported energy to meet demand\u201d. OEUK will look for an immediate meeting with the Chancellor to \u201cexplore every option to reverse this policy and prevent further economic and industrial damage\u201d.<\/p>\n
\u201cToday, the government turned down \u00a350bn ($66bn) of investment for the UK and the chance to protect the jobs and industries that keep this country running. Instead, they\u2019ve chosen a path that will see 1,000 jobs continue to be lost every month, more energy imports and a contagion across supply chains and our industrial heartlands,\u201d said David Whitehouse, OEUK chief executive.<\/p>\n
No new exploration wells have been drilled in 2025, and domestic oil and gas production has fallen by 40% in the last five years and is on course to halve again by 2030. OEUK believes that this is an \u201caccelerated decline driven by government policy, not geology\u201d.<\/p>\n
\u201cThe future of North Sea energy depends on investment, which won\u2019t come without urgent reform of the windfall tax. If the levy stays in place beyond 2026, projects will stall, and jobs will vanish, no matter how pragmatic the licensing policy becomes. Waiting four years for reform of this tax is too late. The North Sea continues to be one of the least competitive places for our industry in the world,\u201d the OEUK chief said.<\/p>\n
OEUK has put forward a reformed plan and even sent a letter in mid-October, co-signed by more than 110 companies, to the minister of industry at the Department for Business and Trade, Chris McDonald, urging the government to remove the energy profits levy. The government still decided against it.<\/p>\n
The association said that the government acknowledged that the UK would need oil and gas for decades to come. And that 10-15bn barrels will be required by 2050. According to OEUK\u2019s plan, half could be produced at home with tax reform in tandem with a better approach to licensing.<\/p>\n","protected":false},"excerpt":{"rendered":"The UK government has announced during its presentation of the budget that the windfall tax, introduced in 2022,…\n","protected":false},"author":2,"featured_media":205562,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[79,179,18,19,17,393],"class_list":{"0":"post-205561","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-eire","11":"tag-ie","12":"tag-ireland","13":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115629958758794762","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/205561","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=205561"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/205561\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/205562"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=205561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=205561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=205561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}