Below is an excerpt:
Energy analysts have given their take on Jeremy Hunt’s decision to ratchet up the North Sea oil and gas windfall tax.
Despite industry’s best efforts to fights its corner, the chancellor delivered on speculation that he would raise the energy profits levy (EPL).
It means North Sea companies will now pay a headline rate of tax of 75%, up from 65% – the level set under the initial windfall tax.
Senior figures within industry have made the case in recent days that any expansion to the current regime risks driving companies, and investment, overseas.
Glenn Kangisser, partner at international law firm Haynes and Boone, said: “Chancellor Jeremy Hunt today announced an extension to the so-called 'Windfall Tax' on UK oil and gas companies, known as the EPL. The increase of the EPL from 25% to 35% (meaning a new effective tax rate of 75% on profits) and the extension of its application from 2025 to March 2028, has borne out some of the worst fears of those in the UK oil and gas Industry. Offshore Energies UK commented earlier in the week that such an extension would put both existing oil and gas projects in the UKCS, as well as future investments in the sector, at significant risk.
“While the Chancellor may feel there are good short-term economic and political reasons to extend the EPL so soon after its introduction in May this year, the long-term impact on the UK’s energy security strategy – which naturally requires a reduced reliance on imports – remains to be seen.”
Excerpted from Energy Voice. To read the full article, click here.