Norway threatens to abandon £4.5bn North Sea oilfield over windfall tax

Energy companies are pushing for changes to the windfall tax thorough industry body Offshore Energies UK. The trade body wrote to the Chancellor last week to ask for six urgent amendments. It has been asked for a “clear termination date” for the tax and an urgent summit with Downing Street.

Nathan Piper, head of oil and gas research at Investec, said: “Equinor have a global portfolio and they can take the money somewhere else if they are concerned around the political support about the development of oil and gas fields in the North Sea.

“Both Rosebank and Cambo are quite well-defined projects and you’re at the point now where the companies are making their final investment decisions. But they will have to reassess that following the windfall tax.

“I’m certain they’ll have to reassess in light of the tax changes and it being a costly place for them to develop. Rosebank is a £4.5bn decision when they’ve just changed the tax terms. It’s real money and you wouldn’t want to spend it if you thought people were going to move the goalposts again.”

“Cambo is also a big investment with a long cycle before you get cash flow. They need a stable taxation regime.”

A spokesman for Equinor said: “Equinor welcomes the North Sea Transition Authority’s decision to extend the license on the Rosebank development project. We will continue to work with our partners and stakeholders to ensure we progress and deliver the Rosebank project to strengthen UK energy security. “

A Treasury spokesman said: “The Energy Profits Levy will raise £5bn from the extraordinary profits oil and gas companies are seeing to help pay for support for millions of the most vulnerable households across the UK.

“The Levy’s investment allowance means businesses will overall get a 91p tax saving for every £1 they invest.”