UK Oil And Gas Windfall Tax Hinders Investments

Several oil and gas majors have announced a rethink on their energy investments, given the UK hike in windfall taxes for energy companies.

• TotalEnergies announced it will cut investments in oil and gas projects in the North Sea by 25% next year, in response to the expanded windfall tax in the UK.
• Shell said it will reassess plans for as much as £25bn of investments in UK operations due to the levy increase and an unstable UK fiscal environment.
• Equinor will evaluate the impacts of the windfall tax on its planned oil and gas projects in the UK.
• Prior to the official release of the Autumn Statement, the Association of British Independent Exploration Companies (BRINDEX) sent a letter to Jeremy Hunt warning him that an increase in windfall taxes would hinder the sector’s appetite and financial ability to invest in new projects.
• Governments all over Europe have introduced or are planning to introduce a windfall tax on energy companies, in order to decrease consumer energy bills by raising funds.
• The risk to future investments is intensified by the loss of Russian gas pipeline flows and ban on Russian seaborne crude exports to Europe.