Offshore staff
LONDON — Research published by the University of Aberdeen suggests the UK government’s Energy Profits Levy could deter investment in new offshore oil and gas projects, notably smaller fields.
Industry association Offshore Energies UK (OEUK) commented that without further investment, by 2030 the UK risks being reliant on imports for at least 80% of its gas and 70% of its oil.
The same applies to offshore wind, with the UK potentially failing to reach the government’s target of 50 GW by 2030 for decarbonization purposes. This follows the introduction last year of the Electricity Generator Levy on low-carbon generators.
Britain’s 75% tax rate could lead some E&P companies to exit the UK for more attractive opportunities elsewhere, OEUK added.
The university’s analysis, compiled by Professor Alex Kemp and Artuto Regaldo, follows last week’s report by the Scottish government that falling oil and gas production could increase Scotland’s emissions and jeopardize jobs.
“We have seen more companies raising concerns about the future of the North Sea and their plans to invest there, and this report is a stark reminder that the windfall tax and the uncertainty it brings is ultimately bad for business,” said Mike Tholen, OEUK’s sustainability director. “New exploration is needed simply to maintain the natural decline in production of North Sea oil and gas. Without new investment, production will fall even faster and could leave us nearly wholly reliant on imports within this decade—offshoring our people, skills and emissions to other countries…
“Our industry wants to work with government to build that future, but we need an attractive and stable fiscal and regulatory regime if we are to achieve it.”
Several companies have already made cuts due to the Energy Profits Levy:
Harbour Energy to cut jobs due to UK windfall tax
EnQuest limits UK capex following energy levy
TotalEnergies reportedly cutting back UK E&P spending
Neptune calls for allowance to soften blow of Dutch North Sea tax plans
03.08.2023
