Offshore staff
LONDON — Britain’s government has announced that the Energy Profits Levy imposed on UK North Sea oil and gas producers last year, lifting the overall tax rate to 75%, will remain in place until March 2028.
However, the government has introduced a mechanism under which if oil and gas prices should fall, the tax rate will return to 40%. That would take effect when oil dips to $71.40/bbl and gas reaches £0.54 (68¢) per therm for two consecutive quarters.
Offshore Energies UK (OEUK) responded that the industry still faces major challenges in protecting the jobs of its 200,000 strong skilled workforce and ensuring the UK’s energy security with domestically produced oil and gas as opposed to imports.
OEUK chief executive David Whitehouse said, “We’ve always been clear that when the windfall conditions go, the windfall tax should go. This is a step in the right direction, but many more will need to be taken to restore confidence to our sector. We will now work closely with government and lenders to understand the detail of the measure and its effectiveness at unlocking investment. Enabling continued UK energy production now and in future depends on a predictable and fair fiscal environment. The UK must be competitive if we are to be successful in the global race for energy investment.”
OEUK expects the industry to contribute more than £20 billion ($25.08 billion) to the UK economy in 2022-23 overall, he added, noting that in the mid-2030s, oil and gas will still provide 50% of the UK’s energy needs.
“We will continue to work closely with government and all parties on the journey to restore sector confidence.”
The government reportedly has received a further £2.8 billion ($3.51 billion) in revenue since imposing the so-call "windfall tax."
06.09.2023
