Impact of New Windfall Tax on North Sea Oil and Gas Producers

The British government's plan to increase the windfall tax on North Sea oil and gas producers could lead to a 12 billion pound drop in revenue, according to industry group Offshore Energies UK. The Energy Profits Levy will rise from 35% to 38%, with its duration extended to March 2030.

The British government's proposal to heighten the windfall tax on North Sea oil and gas producers is projected to slash state revenue by 12 billion pounds, an industry group reported.

Effective from Nov. 1, the Energy Profits Levy (EPL) will elevate from 35% to 38%, catapulting the overall tax rate to 78%, one of the highest globally. Additionally, the levy's 29% investment allowance will be removed.

Offshore Energies UK projected these changes would lead to a significant drop in capital investment within the sector, from 14 billion pounds to 2.3 billion pounds, and accelerate the decline of domestic oil and gas production.

(With inputs from agencies.)