Offshore Energies UK (OEUK) has condemned the government’s decision in today’s Budget (26/11) to reject replacement of the Energy Profits Levy (EPL) in 2026 – a move that will cost tens of thousands of jobs, cripple investment, and undermine Scotland and the UK’s energy security.
OEUK will now meet its 450 member companies for urgent talks – including operators, contractors, and supply chain firms working across oil and gas, wind, hydrogen and carbon capture projects – all critical to the UK’s energy future. Together they support the livelihoods of over 200,000 people whose jobs now face growing risk as Britain turns to imported energy to meet demand.
OEUK is also seeking an immediate meeting with the Chancellor to explore every option to reverse this policy and prevent further economic and industrial damage.
David Whitehouse, OEUK Chief Executive, said:
'Today, the government turned down £50 billion of investment for the UK and the chance to protect the jobs and industries that keep this country running. Instead, they’ve chosen a path that will see 1,000 jobs continue to be lost every month, more energy imports and a contagion across supply chains and our industrial heartlands.
'This is not over. We will keep pressing for change – this industry’s people, their communities and the value of this strategic national asset are too important to dismiss. The Government was warned of the dangers of inaction – they must now own the consequences and reconsider.
'The future of North Sea energy depends on investment, which won’t come without urgent reform of the windfall tax. If the levy stays in place beyond 2026, projects will stall and jobs will vanish, no matter how pragmatic licensing policy becomes. Fixing this outdated tax is the key to unlocking billions in investment across the UK’s entire energy mix.
'Waiting four years for reform of this tax is too late. The North Sea continues to be one of the least competitive places for our industry in the world. We put forward a pragmatic plan: a reformed, permanent windfall tax in exchange for billions in UK investment, more tax paid, and jobs sustained. Government said no.'
The government acknowledges the UK needs oil and gas for decades to come. As renewables roll out, 75 per cent of the UK’s energy still comes from oil and gas and 10-15 billion barrels are required by 2050. OEUK has shown how half of this amount could be produced at home with tax reform in tandem with a pragmatic approach to licensing. Otherwise imports will continue to rise as jobs, projects and investment move overseas.
OEUK is reviewing both the full detail of the Budget and the government’s latest guidance on licensing, and the Future of the North Sea consultation outcome, announced today. OEUK has consistently advocated for a pragmatic outcome on licensing.
No new exploration wells have been drilled in 2025 and domestic oil and gas production has fallen by 40% in the last five years and is on course to halve again by 2030. This is an accelerated decline driven by government policy, not geology.
Source: OEUK
