UK Oil and Gas Group Says Earlier Tax Shift Could Raise £14.9 Billion

Offshore Energies UK (OEUK) says bringing forward a new Oil and Gas Revenue Levy (OGRL) from 2030 to January 2027 could raise an extra £14.9 billion for the UK over the next decade. The industry group argues the earlier, price-triggered regime would restore investor confidence in the North Sea after repeated tax changes since 2022 have driven operators away.

By AI NewsroomPublished about 23 hours agoUpdated about 23 hours ago0 views

Why It Matters

The timing and design of the successor to the Energy Profits Levy could affect both government receipts and the health of UK North Sea production: OEUK contends an earlier OGRL would boost tax revenues while reducing fiscal uncertainty that has discouraged investment.

Key Facts

Organisation: Offshore Energies UK (OEUK)
Proposed implementation date: January 2027
Current planned replacement date for Energy Profits Levy: 2030
Estimated additional revenue from earlier OGRL: £14.9 billion ($20 billion)
Breakdown of OEUK estimate: £2.4 billion from fiscal trajectory change plus £12.6 billion from additional payroll taxes

Industry group Offshore Energies UK (OEUK) has told the Burnham government that introducing the Treasurys planned Oil and Gas Revenue Levy (OGRL) from January 2027 could deliver roughly £14.9 billion more to public coffers than current plans. OEUK set out the recommendation in its annual Economic Report and urged Chancellor John Healey to bring forward the change that is currently scheduled for 2030. The OGRL is designed as a price-triggered successor to the Energy Profits Levy and would apply a 35% levy on revenues when oil trades above $90 per barrel and gas above 90p per therm. It would sit on top of the existing ring-fenced corporation tax rate of 30% and a supplementary charge of 10% under the proposals described by OEUK. OEUK says moving the OGRL forward would produce about £2.4 billion more than the existing fiscal trajectory across the next decade and a further £12.6 billion from additional payroll tax receipts, giving a combined uplift of £14.9 billion. The group argues that a clearer, earlier permanent tax framework would help stem an exodus of operators from the UK Continental Shelf after multiple regime changes since 2022. The report notes that the UKs fiscal arrangements for oil and gas have been altered several times by both Conservative and Labour administrations, beginning with a windfall tax introduced in 2022. OEUK executives say the uncertainty and higher tax burden under recent policies have discouraged investment and accelerated declines in North Sea activity, while urging the government to use Budget choices to attract private capital, preserve jobs and bolster energy security.