BP says North Sea is no longer ‘competitive’ and urges Andy Burnham to scrap windfall taxes on oil and gas
BP has warned that the North Sea oil and gas industry is no longer "competitive" internationally and has called on Andy Burnham to scrap windfall taxes on the sector. The company argues that the current tax regime is discouraging investment and undermining the region's ability to attract capital compared with other oil and gas basins worldwide.
The intervention places pressure on the government to reconsider its approach to North Sea taxation, amid wider industry concerns about the impact of windfall levies on jobs and future energy investment in the UK. BP's comments add to a broader debate over how to balance revenue-raising from energy firms with maintaining the North Sea's appeal to investors.
- BP says North Sea oil and gas is no longer internationally competitive.
- Firm urges Andy Burnham to scrap windfall taxes on the sector.
- Warning highlights investment concerns amid ongoing UK energy tax debate.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Industry figures argue that the Energy Profits Levy has pushed the effective tax rate on North Sea oil and gas to around 78 per cent, among the highest in the world, deterring the investment needed to sustain jobs, domestic energy supply and the UK's offshore engineering skills base. They contend that without competitive tax terms, capital will simply flow to other basins such as Norway or the Gulf, accelerating the North Sea's decline, costing tens of thousands of jobs in communities like Aberdeen, and leaving Britain more reliant on imported oil and gas rather than its own resources during the energy transition.
The case against
Supporters of the windfall tax argue that oil and gas producers reaped exceptional, unearned profits when global prices spiked after Russia's invasion of Ukraine, at the very moment households faced crippling energy bills, and that it is fair for a share of those gains to fund cost-of-living support and public services. They contend that scrapping the levy would hand a tax break to highly profitable multinational companies while doing little to lower bills, which are set by global markets, and that public money is better directed towards accelerating renewable energy and reducing long-term dependence on volatile fossil fuel prices.