Cavendish research director James McCormack spoke with Proactive about the UK North Sea oil and gas sector and the impact of the Energy Profits Levy (EPL).
He said the levy, introduced in 2022 as a temporary 25% tax, has since risen to 38% and been extended to 2030, driving investment uncertainty. “The UK tax rate has gone from 40% in 2021 to 78% today,” he noted, warning this is deterring exploration and production.
McCormack argued the fiscal regime is accelerating output decline and increasing reliance on imports, exposing the UK to global price volatility. Exploration hit a record low in 2024, with just four wells drilled.
He warned that ongoing policy instability risks turning the North Sea into a “stranded opportunity,” with early field closures, rising decommissioning costs and job losses.
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