Trade body Offshore Energies UK (OEUK) yesterday repeated its calls for Britain to prioritise home-produced energy.

It came as the UK Government issued draft legislation for the Energy (Oil and Gas) Profits Levy Bill.

The Government is now seeking technical feedback before the bill is published.

OEUK yesterday said it will continue to make the case for a stable tax regime which encourages companies to invest in oil and gas in British waters, and avoids increasing the country's reliance on imported energy.

The consultation on the draft legislation closes next Tuesday.

OEUK says offshore oil and gas operators are already expected to pay £7.8billion in production taxes alone in 2022. While the Treasury expects the new windfall tax on them to initially raise an additional £5billion, the North Sea industry has warned this could come at a cost to future offshore energy investment and ultimately the taxes and jobs associated with a strong UK sector.

OEUK external relations director Jenny Stanning said the trade body is continuing its dialogue with the Government to ensure the industry is heard throughout the process of designing the legislation.

Meeting with Treasury requested

She added: "We continue to call for a meeting with the Treasury to set out the positive contribution of this sector.

"Our industry is very proud to pay its taxes and support the UK Government and consumers, especially in difficult times like these.

"The Treasury believes our sector will contribute nearly £13billion towards the Government's £15billion package to support consumers.

"The problem is that new taxes dent investor and industry confidence.  That is why the industry always considers a stable and predictable fiscal regime to be key to its investment criteria.

"Ensuring reliable supplies of home-produced energy is essential to ensure we don't further add to the cost-of-living crisis.

"This means supporting the production of oil and gas today while increasingly ramping up availability of cleaner energies using many of the same companies, keeping them anchored here in the UK for the long term - supporting jobs and local communities."

Possible question marks over two big offshore projects

At the weekend, it was reported that are now possible question marks over two big offshore developments by Equinor and Shell following the introduction of the energy-profits levy (EPL).

Norwegian energy group Equinor later dismissed as "speculation" a claim that it has threatened to abandon a £4.5billion field development off Shetland.

But the denial over plans for Rosebank will have done little to calm the nerves of the offshore industry which fears long-term damage from the EPL.

Rosebank is one of the largest untapped reserves in British waters, and is thought to be capable of producing 300million barrels of oil.

The Telegraph has said that Equinor had privately told industry contacts it was reconsidering its plan to develop the find.

Sources told the newspaper that Equinor wants the Government to change the terms of the EPL before committing to the investment.

The Telegraph also said that Shell has separately told analysts it is also less likely to develop the £2billion Cambo project in the North Sea after the tax hike.

Meanwhile, the Times has suggested Equinor would not abandon the Rosebank project, and might only be planning a postponement or a slower stepping up in work.

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