North Sea oil and gas is being ‘taxed to death’, energy firms warn

The North Sea is being taxed ‘to death’, a trade body warned as the Chancellor refused to scrap the windfall tax.

Oil and gas firms were hit with the energy profits levy in 2022 as prices soared in the wake of Russia’s invasion of Ukraine.

Critics claim it has hit investment and jobs – piling pressure on the Government to scrap or reform the tax now that oil has fallen back towards $60 a barrel from around $120 when it was introduced. But Rachel Reeves refused to budge yesterday.

Aberdeen and Grampian Chamber of Commerce chief executive Russell Borthwick said: ‘Without so much as a mention in the Chancellor’s statement, the UK government has opted for a cliff-edge end to North Sea production and to tax the industry to death inside five years. 

‘Jobs will be lost in their thousands as a direct result of this government’s failure to act.’

The Government will allow oil and gas drillers to develop new fields next to existing ones, however, in a move ministers insisted was in line with manifesto pledges not to issue new licences.

So-called ‘transitional energy certificates’ – or ‘tiebacks’ as they are known – were given the go-ahead in a bid to keep oil and gas flowing.

Windfall tax: Oil and gas firms were hit with the energy profits levy in 2022 as prices soared in the wake of Russia’s invasion of Ukraine

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