UK finance minister to meet North Sea execs on windfall tax

Britain's Chancellor of the Exchequer Jeremy Hunt walks at Downing Street in London
Britain's Chancellor of the Exchequer Jeremy Hunt walks at Downing Street in London, Britain, November 17, 2022. REUTERS/Toby Melville/File Photo

LONDON, Dec 7 (Reuters) - British finance minister Jeremy Hunt will meet leaders of North Sea oil and gas producers on Friday to discuss the government's windfall tax, three industry sources told Reuters on Wednesday.

Hunt last month announced plans to boost the Energy Profits Levy (EPL) on oil and gas companies from 25% to 35%, bringing the total taxes on the sector to 75%, one of the highest rates in the world.

The government said the levy would raise funds to help people struggling with increased living costs, largely driven by energy prices that surged after energy exporter Russia invaded Ukraine in February.

Friday's meeting, which will be held in either Aberdeen or Edinburgh, will be attended by senior representatives from more than a dozen North Sea producers inlcuding BP (BP.L) and Shell (SHEL.L) as well as industry bodies, according to a list seen by Reuters.

A Treasury source confirmed Hunt would meet oil and gas executives this week. Senior officials from the Department for Business, Energy and Industrial Strategy (BEIS) would also attend, the sources said.

Shell and BP declined to comment. BEIS did not immediately respond to a request for comment.

Oil and gas industry executives warned that the new tax risked a flight of capital from the ageing basin at a time when the government is trying to increase Britain's energy security.

Executives have urged the government to introduce a price floor to the EPL to allow stable investments.

Benchmark Brent oil prices traded below $80 a barrel, the lowest since January and far below a spike well above $100 shortly after the Ukraine war began. Natural gas prices remain above their historical average .

Reporting by Ron Bousso and Shadia Nasralla; Editing by Alex Richardson and Nick Macfie

Our Standards: The Thomson Reuters Trust Principles.

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Ron has covered since 2014 the world’s top oil and gas companies, focusing on their efforts to shift into renewables and low carbon energy and the sector's turmoil during the COVID-19 pandemic and following Russia's invasion of Ukraine. He has been named Reporter of the Year in 2014 and 2021 by Reuters. Before Reuters, Ron reported on equity markets in New York in the aftermath of the 2008 financial crisis after covering conflict and diplomacy in the Middle East for AFP out of Israel.

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Writes about the intersection of corporate oil and climate policy. Has reported on politics, economics, migration, nuclear diplomacy and business from Cairo, Vienna and elsewhere.