(WO) – The UK government’s decision to maintain the Energy Profits Levy (EPL) at a 78% headline tax rate continues to cloud investment planning for North Sea operators, according to Alan Stewart, Aberdeen-based partner at accountancy and advisory firm MHA.
Stewart said the absence of any policy movement leaves companies without the predictable long-term framework needed to commit capital to new projects. “The uncertainty facing the sector remains unchanged,” he noted. “Companies cannot plan effectively without a stable long-term framework, and today’s outcome does little to address the hesitation already evident across investment decisions.”
Operators have repeatedly warned that the levy—introduced during the post-Ukraine price spike and extended to 2030—has paused developments, increased risk premiums and forced portfolio rebalancing away from the UK Continental Shelf. Stewart said the broader industry continues to feel the effects.
“A 78% tax rate continues to cast a long shadow over activity, pausing projects, slowing commitments and weakening confidence throughout the UK’s wider energy ecosystem,” he said.
Stewart added that the lack of clarity affects more than upstream producers. Supply-chain firms, local contractors and regional economies all face a prolonged period of caution as operators delay decisions. “Stability is essential for maintaining secure domestic supply and for giving businesses the confidence to invest in both current production and future technologies,” he said.
He warned that without a “consistent and durable approach,” the UK risks deepening the slowdown at a time when energy security, investment visibility and long-term planning are critical.
Image: Shell
