Does government’s windfall tax make oil majors more likely to ditch giant North Sea projects?

Equinor is reportedly reconsidering its plan for a field near the Shetland Islands

Big Zero Report 2022

The implementation of a windfall tax on oil and gas companies’ profits has reportedly made some rethink their new fossil fuel projects in the North Sea.

The Telegraph has reported that Norwegian energy company Equinor is reconsidering its plan to drill for oil and gas in the North Sea, in the Rosebank field near the Shetland Islands.

Reports claim that Equinor wanted the government to change the terms of its Energy Profits Levy before it commits to the project.

Last month, the Chancellor announced a temporary windfall tax of 25% on the excess profits of oil and gas firms.

An Equinor spokesperson told ELN the company stands behind the Offshore Energies UK’s position on the Energy Profits Levy and has no other comments.

The spokesperson added: “As for Rosebank, we are engaging with suppliers and working with our partners and stakeholders to ensure we progress and deliver the Rosebank project to strengthen UK energy security, create local value through highly skilled jobs and enable the UK to reach net zero targets in line with the North Sea Transition Deal.”

A HM Treasury spokesperson told ELN: “The Energy Profits Levy will raise £5 billion from the extraordinary profits oil and gas companies are seeing to help pay for support for millions of the most vulnerable households across the UK.

“The levy’s investment allowance means businesses will overall get a 91p tax saving for every £1 they invest.”

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