Equinor Evaluating Impact of UK Windfall Tax on Projects

Ron Bousso
Wednesday, November 23, 2022

The Norwegian oil company Equinor said on Tuesday it is evaluating the impact of Britain's windfall tax on its oil and gas projects, including the giant Rosebank development. 

"The British government's decision last week to raise the windfall tax on North Sea producers to 35% from 25% "does not help investor confidence," Equinor said in a statement.

"Uncertainty makes it harder to take investment decisions, especially the uncertainty around the longevity of the EPL (Energy Profits Levy)," Equinor said, referring to the tax. 

"The Autumn Statement did not help investor confidence, and we are evaluating the impact of the EPL on our projects," the company added in the statement provided to Reuters. 

Shell on Monday also said it was reviewing its 25 billion pound investment plans in Britain in the wake of the windfall tax, which brought the total taxes on the oil and gas sector in Britain to 75%, among the highest in the world.

Equinor is preparing to make a final investment decision on the Rosebank project in the North Sea, one of the largest developments in recent years, in the first quarter of 2023. 

The field is expected to produce 70,000 barrels of oil equivalent per day (boed) at its peak.

The Rosebank project is estimated to bring 26.8 billion pounds to the British economy through tax payments and investments, Equinor said. 

Equinor and Suncor Energy each have a 40% interest in the Rosebank project, while newly-listed Ithaca Energy has the remaining 20%. 

(Reuters - Reporting by Ron Bousso; Editing by Jane Merriman and Alexander Smith)

Categories: Industry News Activity Production Regulations UKCS

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