# UK oil, gas firms to leave year’s worth of output in ground with tax hikes-report Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-03-27 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Impact of Windfall Taxes on UK Oil and Gas Producers Meta Description: Learn why oil and gas companies in the British North Sea are expected to leave 500 million barrels of oil equivalent in the ground due to windfall taxes. URL: https://financedigest.com/uk-oil-gas-firms-to-leave-years-worth-of-output-in-ground-with-tax-hikes-reporthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-03-27t231525z1lynxmpej2q11yrtroptp4climate-change-britain-oil-1736814253576-compressed.jpg) LONDON (Reuters) – Windfall taxes mean oil and gas producers in the British North Sea will likely leave 500 million barrels of oil equivalent in the ground over the next decade, the equivalent of one year’s output in the ageing basin, industry group OEUK said on Tuesday. Over the past year, Britain has introduced windfall taxes on oil and gas as well as on renewables, which companies say stifles investment and in turn will likely increase Britain’s dependence on imported fuels and derail its climate targets. In the oil and gas sector, the taxes are likely to result in reduced investment of between 3 billion to 5 billion pounds ($3.67 billion to $6.12 billion) over the next decade or so, Offshore Energies UK (OEUK) market intelligence manager Ross Dornan told reporters. This reduction in investment is [expected despite a tax incentive of around](https://www.financedigest.com/around-40-of-german-companies-expect-output-decline-in-2023-iw-institute.html "Around 40% of German companies expect output decline in 2023 – IW institute") 91 pence per pound spent on new hydrocarbon production, which renewables producers are also calling for in their sector. The [British North Sea produced just under 1.4 million](https://www.financedigest.com/british-ev-startup-arrival-gets-300-million-funding-aims-to-slow-cash-burn.html "British EV startup Arrival gets 0 million funding, aims to slow cash-burn") barrels of oil equivalent per day (boed) last year, down from a peak of around 4.4 million boed in 1999. When we talk about investment in the UK oil and gas resources, it’s not about [exponential growth](https://www.financedigest.com/sales-of-electric-bicycle-motors-market-to-record-exponential-growth-during-2017-2025.html "Sales of Electric Bicycle Motors Market to Record Exponential Growth During 2017 – 2025"), it’s about managed decline,” Dornan said. Britain, a net energy importer since 2004 whose energy mix last year was made up of 76% oil and gas, will likely produce 500 million barrels less hydrocarbons – “enough to support the nation for six months or (the) same as one [year’s North Sea output” – due to investment cuts](https://www.financedigest.com/inpost-sees-better-margin-in-poland-plans-no-job-cuts-this-year.html "InPost sees better margin in Poland, plans no job cuts this year"), according to the OEUK. The report came as [Britain’s government is set](https://www.financedigest.com/britain-sets-5g-goal-says-no-magic-number-of-operators.html "Britain sets 5G goal, says no ‘magic number’ of operators") to announce energy security measures on Thursday, according to industry sources, which could see changes to taxes and investment incentives for the offshore industry. Any fresh incentives for [oil producers are likely to be decried by climate activists, not least since Britain experienced an oil leak over the weekend at Anglo-French oil company](https://www.financedigest.com/exxon-sues-eu-in-move-to-block-new-windfall-tax-on-oil-companies.html "Exxon sues EU in move to block new windfall tax on oil companies") Wytch Farm’s onshore field in Dorset. Britain’s biggest oil and gas producer, Harbour, has announced [job cuts](https://www.financedigest.com/icrc-to-cut-some-1500-jobs-as-humanitarian-budgets-seen-sliding.html "ICRC to cut some 1,500 jobs as humanitarian budgets seen sliding") and shunned the latest licensing round. TotalEnergies cut its UK [investment programme](https://www.financedigest.com/board-of-russias-avtovaz-approves-585-million-in-2023-investment-programme-ria-agency.html "Board of Russia’s AvtoVAZ approves 5 million in 2023 investment programme – RIA agency") by a quarter. Development of what would be the world’s largest wind farm off the coast of Britain is in doubt, with Orsted [saying it needs](https://www.financedigest.com/europe-power-firms-need-1-5-trillion-euros-in-margin-calls-equinor-says.html "Europe power firms need 1.5 trillion euros in margin calls, Equinor says") more support to proceed with the project. ![](https://www.globalbankingandfinance.com/wp-content/uploads/2023/03/a1a.jpg) GRAPHIC: Britain’s biggest [oil and gas](https://www.financedigest.com/oil-gas-downhole-cables-market-to-witness-widespread-expansion-during-2019-2027.html "Oil & Gas Downhole Cables Market to Witness Widespread Expansion During 2019-2027") producers https://www.reuters.com/graphics/BRITAIN-OIL/zdvxowamwpx/chart.png ![](https://www.globalbankingandfinance.com/wp-content/uploads/2023/03/a2a.jpg) GRAPHIC: UK government revenue from [oil and gas](https://www.financedigest.com/the-top-strategies-for-investing-in-the-oil-and-gas-industry.html "The Top Strategies for Investing in the Oil and Gas Industry") sector https://www.reuters.com/graphics/BRITAIN-OIL/TAX/akpezrnzavr/chart.png ![](https://www.globalbankingandfinance.com/wp-content/uploads/2023/03/a3a.jpg) GRAPHIC: Britain’s [oil and gas production](https://www.financedigest.com/best-paying-jobs-in-oil-and-gas-production.html "Best Paying Jobs in Oil And Gas Production") https://fingfx.thomsonreuters.com/gfx/ce/byprjzeljpe/Britain’s%20oil%20and%20gas%20production.png ($1 = 0.8166 pounds) (Reporting by Shadia Nasralla; Editing by Sharon Singleton) --- This blog is powered by Superblog. 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