Reforming the 78%Energy Profits Levy(EPL)in 2026 could deliver an extra£15.7 billion in government revenue over ten years.
New analysis from Offshore Energies UK(OEUK)shows the move would increase tax receipts from£32.9 billion to£48.6 billion by sustaining jobs and investment across the offshore sector.
The projected rise includes£7.5 billion in payroll taxes generated by retained employment,£6.3 billion in additional corporation tax from oil and gas operators and£4.6 billion from the new oil and gas price mechanism.
OEUK argues these gains would offset short-term reductions in production tax receipts.
The organisation says the proposed reform would unlock£50 billion of UK oil and gas projects and help maintain tens of thousands of jobs.
It adds that the benefits would support energy security and net zero goals.
David Whitehouse,OEUK Chief Executive,said:“Our proposal will unlock immediate investment,secure tens of thousands of jobs and deliver more tax,not less for essential services like schools and hospitals.
“The future of the North Sea is in our hands.”
OEUK’s data identifies 111 projects that are economically viable under reformed conditions.These represent 3.25 billion barrels of reserves and could supply at least half of the UK’s oil and gas needs to 2050 from domestic production.
The group estimates these projects could add£75 billion to the UK economy by 2035.It warns that delaying reform until 2030 risks accelerating the decline of North Sea output,which is forecast to fall by 40%by 2030 without action.
OEUK says this would result in the loss of 1,000 jobs per month and increase reliance on imported energy.
It argues that the Office for Budget Responsibility’s oil and gas revenue forecasts are overstated because of weaker commodity prices,with expected production revenue falling from£11.5 billion to£6.7 billion between 2026/27 and 2029/30.
Reforming the EPL would also help safeguard the offshore workforce,supply chain and key industrial hubs including Aberdeen,Teesside,Grangemouth and East Anglia.
