North Sea Industry Calls for Immediate Reform to Tax Regime as Jobs and Investment Decline

Over seven thousand companies and business leaders have issued a public call for urgent government action, pressing for the immediate implementation of the new North Sea fiscal regime. The demand comes amid mounting concerns about job losses and reduced investment, which have been linked to the current energy profits levy imposed on oil and gas firms operating in the United Kingdom sector of the North Sea.

Esteemed figures such as oil industry magnate and philanthropist Sir Ian Wood, Martin Gilbert of Revolut, and Aberdeen Football Club’s Dave Cormack have added their signatures to the open letter. The initiative has also drawn backing from First Minister John Swinney, port authorities across Scotland, and key industry bodies, including Scottish Financial Enterprise and Scottish Renewables.

The collective letter, delivered via the British Chambers of Commerce and Aberdeen and Grampian Chamber of Commerce, addresses the Treasury in response to the decision by Chancellor Rachel Reeves to retain the energy profits levy until 2030. Currently, this levy subjects North Sea oil and gas companies to taxes as high as 78 percent on UK profits. The tax, originally introduced in 2022 during a period of surging commodity prices following Russia’s invasion of Ukraine, has remained in place despite a significant drop in oil and gas prices since then.

Industry leaders argue that the persistent high tax environment is directly responsible for widespread redundancies and a slowdown in investment, which threatens the stability of Scotland’s energy sector. A new price mechanism, set to come into force from April 2030, would only tax companies when prices exceed specified thresholds. Business groups now contend that this reform should be adopted without delay in order to mitigate further economic harm.

Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, emphasised that high taxation is pushing the North Sea sector into decline, disproportionately affecting workers and communities dependent on the industry. He called for immediate and decisive measures to protect the workforce, maintain supply chains, and slow the reduction in domestic oil and gas output, which would reduce reliance on imports and benefit the nation’s public finances.

The urgency expressed in the letter is underscored by recent forecasts from the Office for Budget Responsibility, which project that government revenue from the North Sea could fall from £4.5 billion to approximately £300 million by 2030. The sector has already seen considerable consolidation, including major mergers such as Ithaca Energy’s acquisition of ENI’s North Sea business and the formation of the Adura joint venture between Shell and Equinor. Recent announcements highlight further alliances among operators, signalling an industry in transition yet deeply concerned about the effects of the current tax regime.

While policy makers have cited positive intentions for a lower carbon future, industry representatives insist that the prevailing fiscal environment continues to repel capital and erode employment, placing Scotland’s critical energy infrastructure at risk.