The EPL was raised from its initial 25% rate to 35% in November, bringing the overall tax burden to 75%.
With Friday's changes the windfall tax would fall away, reducing the tax burden to 40%, if average oil and gas prices fall to or below $71.40 a barrel for oil and 0.54 pounds ($0.6784) per therm for gas in two consecutive quarters.
However, the government said independent price forecasts by the Office for Budget Responsibility suggest the price floor mechanism is unlikely to be triggered before the windfall tax’s planned end date in March 2028.
UK North Sea oil and gas producers including TotalEnergies (TTEF.PA) and Harbour (HBR.L) have said the levy would result in them cutting investment in the basin.
Reuters GraphicsBritain was a net exporter of oil as recently as the 2000s, but now depends on both oil and gas imports.
Persons:
Sarah Young, Shadia Nasralla, William James, Kate Holton, David Goodman
Organizations:
Brent, OPEC, Iraq, Reuters Graphics Britain, Reuters Graphics Reuters, Thomson
Locations:
Ukraine, Britain