The North Sea oil and gas sector’s trade body, Offshore Energies UK, has petitioned the Labour government to end the current windfall tax on energy companies in 2027 rather than 2030. The proposal would replace the existing energy profits levy with a narrower tax structure that only activates during periods of elevated commodity prices.
The push comes as Britain faces another winter of elevated energy costs, with household bills projected to reach three-year highs amid ongoing geopolitical tensions affecting global energy markets. Wholesale gas prices have risen sharply, and major oil and gas companies have posted substantial profits following recent market disruptions. OEUK argues that transitioning to a revenue-based levy would maintain high tax burdens on producers during price spikes while encouraging long-term investment in North Sea operations.
The industry group contends that accelerating the tax reform could unlock approximately £50 billion in investment and generate up to £14.9 billion in additional tax revenue over the next decade, though the majority of projected gains would stem from employment taxes rather than direct levies on energy companies. OEUK leadership acknowledged the political sensitivity of requesting tax relief during a period of consumer financial strain but framed the measure as supporting workers and energy security.
The proposal also includes calls to approve two significant offshore projects, Rosebank and Jackdaw, which OEUK says would reduce Britain’s reliance on imported natural gas. A decision on Jackdaw has been delayed pending upcoming political events.
Environmental and consumer advocacy groups have opposed the industry’s position, arguing that the windfall tax should be strengthened rather than weakened to fund cost-of-living assistance. Critics characterized the requests as untimely given record profits generated during supply disruptions and mounting climate concerns.
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