Lates News

The UK government has decided to continue imposing a windfall tax on North Sea oil and gas producers, rejecting industry calls to end the levy next year. Under the budget announced on Wednesday, the Energy Profits Levy (EPL), currently at a rate of 38%, will remain in place until April 1, 2030, unless the price floor mechanism is triggered earlier and terminates it. Once the EPL expires, a permanent tax mechanism linked to energy prices will immediately replace it. The UK North Sea oil and gas basin has entered a late stage of development, and relevant operators have been urging the Labour government to introduce a new fiscal mechanism next year rather than waiting until the end of the decade. They argue that an earlier transition of the tax regime would stimulate investment and increase production, thereby generating more tax revenue for the government. Oil and gas producers have long complained that the EPL undermines the UK's attractiveness to investors. In recent years, several companies have reassessed their UK operations, choosing to sell, merge, or scale down operations. BP is currently the only major oil company that still has an independent North Sea business, but the company is in the process of exiting the region.