OEUK calls for fiscal stability to support North Sea oil and gas investment

Offshore staff

LONDON – Britain’s Chancellor Rishi Sunak resisted calls to impose a windfall tax on North Sea oil and gas companies in his Spring Statement earlier this week.

Trade association Offshore Energies UK (OEUK) responded to the Statement and forecasts by the UK Office for Fiscal Responsibility. Commenting, OEUK CEO Deirdre Michie OBE said: “The OBR figures published today show that the oil and gas industry is forecasted to pay £15.7 billion [$20.67 billion] in taxes over the next three years, significantly more than expected last October.”

She added: “£11 billion [$14.48 billion] of that is forecasted to be paid by the end of 2023. A predictable and stable fiscal regime will ensure industry continues to attract investment in energy supplies, support energy security, and accelerate net zero. We will work with the government as they look to encourage capital investment across the UK in support of this.” 

Michie further added that: “Our industry needs long term confidence in the UK, allowing us to make major investment decisions in both oil and gas production and the new low carbon technologies including Carbon Capture and Storage, hydrogen and offshore wind.” 

Recent press reports suggest that Shell has submitted revised plans for its HP/HT Jackdaw gas project in the central UK North Sea. The Oil and Gas Authority rejected last year’s initial submission.

According to other reports, Shell is also re-considering its decision to pause investment in the deepwater Cambo oil project northwest of the Shetland Islands, in light of recent global developments and higher energy process.

3/25/2022