• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 days Does Toyota Know Something That We Don’t?
  • 5 days World could get rid of Putin and Russia but nobody is bold enough
  • 16 hours America should go after China but it should be done in a wise way.
  • 6 days China is using Chinese Names of Cities on their Border with Russia.
  • 8 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 8 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 8 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 7 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 8 days Putin and Xi Bet on the Global South
  • 8 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 9 days United States LNG Exports Reach Third Place
  • 9 days Biden's $2 trillion Plan for Insfrastructure and Jobs

UK Oil Industry Threatens Investment Reconsideration

Some UK oil producers have suggested that the windfall tax announced yesterday by Chancellor Rishi Sunak could lead to a review of their investment plans for the North Sea.

The Financial Times reports that the industry had expected a one-off hit from the tax but instead had been surprised with the Exchequer’s plans to keep the levy in place until 2025. In addition, it would bypass certain tax relief measures in place currently.

The latter part will also affect the investment plans of oil companies, according to industry experts.

“Naturally we will now need to look at the impact of both the new levy and the tax relief on our North Sea investment plans,” said BP, as quoted by the FT.

The tax will “drive away investors and so reduce UK energy production”, said the chief executive of Offshore Energies UK, Deirdre Michie, adding, “Right now, the key task is to prevent a flood of investment formerly earmarked for UK energy projects now being diverted to Norway, Saudi Arabia, and Qatar.”

Chancellor Rishi Sunak announced on Thursday a new temporary 25-percent Energy Profits Levy for oil and gas companies, reflecting their extraordinary profits as oil and gas prices surged.

The tax will immediately boost the total tax rate paid by North Sea operators to 65 percent, raising some $6.33 billion (5 billion pounds), the FT noted in its report.

The move has long been opposed by the industry, which argues that a windfall tax would add uncertainty to the UK tax regime and will hit new investments in the UK North Sea at a time when the country grapples with reducing reliance on foreign imports of oil and gas.


Despite numerous calls and letters from the offshore operators and offshore services firms not to impose a windfall levy, the UK government proceeded with it and said that the new levy “will include a generous new 80% investment allowance.”

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News