A revised fiscal framework for the North Sea oil and gas sector could stimulate up to £50 billion in fresh investment, according to the industry’s trade body, Offshore Energies UK. The organisation’s latest annual economic report argues that a more favourable licensing and tax regime would enable the extraction of an additional 3.5 billion barrels of oil equivalent from the region by mid-century, bolstering the United Kingdom’s energy security and contributing significant revenues to the Treasury.

The report highlights 111 viable projects that could help reduce the UK’s dependence on imported fossil fuels while generating economic benefits nationwide. Central to Offshore Energies UK’s recommendations is an earlier introduction of the oil and gas revenue levy, a tax mechanism approved by the industry, currently scheduled for implementation in 2030. The trade body proposes bringing the levy into effect next year, alongside an early termination of the existing energy profit levy, which currently imposes an effective tax rate of 78% on UK profits.

According to Offshore Energies UK, this adjustment could result in an additional £2.4 billion in corporate tax receipts and £12.6 billion more in payroll taxes collected up to 2037. The group also calls for greater prioritisation of Britain’s domestic hydrocarbon resources as part of a comprehensive energy strategy.

The report comes amid growing unease over delays in approving the Jackdaw gas field development, with final decisions now expected only after the upcoming Holborn & St Pancras by-election next month, having initially been anticipated imminently. This slowdown has drawn criticism as North Sea oil and gas output has steadily declined since the early 2000s, with the UK a net importer of fossil fuels for over two decades.

While governmental leaders, including the prime minister, chancellor, and energy secretary, have recently underscored the importance of oil and gas alongside renewable energy, Offshore Energies UK urges a shift from supportive rhetoric to concrete policy changes. David Whitehouse, the organisation’s chief executive, emphasised the need for the UK to back all forms of energy production, including accelerating renewable deployment, while still supporting continued North Sea development during the ongoing transition.

The energy profit levy introduced in 2022 under former Prime Minister Boris Johnson has been controversial, prompting some major operators to reduce workforce levels, pursue overseas diversification, or consider asset disposals. Notably, BP’s recent decision to put its North Sea assets up for sale has been viewed as a significant turning point in sector confidence.

Offshore Energies UK contends that an earlier implementation of the industry-endorsed revenue levy would unlock substantial new investment, support domestic energy output, and stimulate supply chain activity across the UK economy. The Department for Energy Security and Net Zero has been approached for comment on the report and its recommendations.