• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 days Does Toyota Know Something That We Don’t?
  • 4 days World could get rid of Putin and Russia but nobody is bold enough
  • 12 hours America should go after China but it should be done in a wise way.
  • 6 days China is using Chinese Names of Cities on their Border with Russia.
  • 8 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 8 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 8 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 6 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 7 days Putin and Xi Bet on the Global South
  • 8 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 8 days United States LNG Exports Reach Third Place
  • 8 days Biden's $2 trillion Plan for Insfrastructure and Jobs

UK Oil Boss: Fighting Windfall Tax Led To Missed Opportunities

The UK’s oil and gas industry should have taken the chance to invest in new projects instead of fighting the windfall tax, the boss of a North Sea oil and gas producer has said.

Steve Brown, chief executive of Orcadian Energy, told City A.M. that the Energy Profits Levy (EPL) created a “big incentive to invest” with the 91 percent tax relief for fossil fuel producers prepared to develop new projects in the North Sea.

This includes Orcadian’s proposed Pilot development in the central North Sea, which is projected to produce up to 79m barrels of oil over its lifetime.

But the company is still looking for an investor to back the project – despite the investment relief in the windfall tax.

“My hope was that I would see lots of these companies which have big EPL bills become very keen to get involved in new projects. They would look at our project, see the fantastic environmental performance of the project, and want to jump in. Instead, the industry was very upset. They really focused on trying to push back on the EPL rather than take advantage of the opportunities,” Brown said.

The windfall tax was introduced last May by then chancellor Rishi Sunak, who unveiled a further 25 percent tax on the profits of oil and gas companies on top of the 40 percent special corporation tax rate they currently pay.

This was then hiked under current chancellor Jeremy Hunt to 35 percent, with the duration expanded from three to six years.

“They really focused on trying to push back on the [Energy Profits Levy] rather than take advantage of the opportunities,” said Steve Brown, chief executive of Orcadian Energy.

Brown argued this was a step too far, however, because while the hiked windfall tax brings rates nearly in line with Norway’s, Norwegian oil and gas fields are at an earlier stage of development compared to the UK’s continental shelf.

“Costs are higher in our basin. Most projects are smaller. You need to find ways to really incentivise that tax for investment decisions. People have lost a bit of confidence that the EPL will actually work the way it says it will on the tin,” he said.

Brown also warned that a future Labour government would likely hurt the sector – which wanted to beyond imposing a windfall tax.

The centre-left party is seeking to scrap the levy and backdate the windfall tax to an earlier date, with opposition leader Keir Starmer pledging no new oil and gas fields under a Labour government.


Brown considered Labour’s approach to be a mistake, as he argued new developments were both more environmentally friendly than ongoing sites in the North Sea and essential for supply security.

“Every politician should be supporting new oil and gas. I don’t care if it’s because they want energy security. I don’t care if it’s because they want jobs. I don’t care if it’s because they want reduced emissions, because new oil and gas can do all three,” Brown said.

He concluded that without new projects and the newly-hiked windfall tax, the UK would become increasingly reliant on carbon-intensive imports such as liquefied natural gas from overseas, alongside production from the remaining ageing fields on the UK’s continental shelf.

By CityAM

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News