The UK Government has published the draft legislation for its new permanent fiscal regime for the North Sea, confirming the structure of the Oil and Gas Revenue Levy (OGRL) that will replace the Energy Profits Levy (EPL) when it ends.
The legislation, published ahead of the next Finance Bill, confirms the OGRL (previously referred to as the OGPM) will come into force when the EPL ends in March 2030, or earlier if the Energy Security Investment Mechanism is triggered.
Under the new regime, upstream oil and gas companies operating in the UK and on the UK Continental Shelf will pay a 35% levy on revenues generated above specified price thresholds during periods of exceptionally high commodity prices.
For 2026-27, those thresholds are set at $90 a barrel for oil and 90p per therm for gas, with both increasing annually in line with inflation.
The Government said the measure is designed to ensure companies continue to pay "their fair share of tax in times of high prices" while providing "a stable and predictable fiscal environment, supporting investment and jobs whilst capturing windfall revenues of energy companies."
You can view the draft legislation in full here.
Ministers have repeatedly stated that the EPL - which has been blamed for thousands of job losses - will come to an end in this parliament.
Energy Minister Michael Shanks told parliament: “We have been really clear that the energy profits levy comes to an end in 2030. We have also put in place what the future of that scheme looks like to provide certainty for the long-term future.”
Chancellor Rachel Reeves also told MPs: “At the Budget, we published our North sea oil and gas plan and provided certainty by announcing that the energy profits levy introduced by the previous Government will end at the end of this Parliament.”
The draft legislation is being published for technical consultation before the Chancellor decides the final contents of the Finance Bill 2026-27 at the next Budget.