More than half (55%) of the UK’s offshore energy firms have reduced their staff headcount in the past year, according to the latest Offshore Energies UK (OEUK) Pulse Survey.
This and other key findings came from a survey of 97 companies and business units across the UK’s offshore energy sector. It was included in OEUK’s Budget Representation, submitted to the UK’s Treasury on behalf of industry to inform policy decisions ahead of the Chancellor’s statement on 26 November.
OEUK’s proposal to reform the Energy Profits Levy in 2026 is a key part of this submission and is supported by its membership of over 420 companies spread across the UK. Under the current fiscal regime the oil and gas industry is losing 1,000 jobs a month – but these losses can be arrested with specific policy changes by the government.
The outlook remains challenging, with nearly half (45%) of surveyed companies expecting to cut jobs further over the next 12 months if the current policy environment continues.
The survey also reveals a growing trend of companies shifting focus overseas, with one respondent stating: “We’re now actively looking to reduce exposure to the UK energy industry and move operations overseas, reducing UK economic activity and tax take (personal and PAYE).”
Another warned: “Ability to provide support to net zero [is] in jeopardy due to rapid decline of baseline hydrocarbon revenues.”
The EPL was repeatedly highlighted as a critical barrier to investment, with one company calling it “the biggest problem we face as an organisation.”
These findings underline the urgent need for reform and a supportive investment climate to protect UK energy jobs and maintain the sector’s contribution to the economy.
OEUK’s EPL reform proposals are gathering support across the wider business community.
Sheena McGuinness, Co-Head of Energy and Natural Resources at RSM UK, the leading global audit, tax and consulting network says: “I welcome Offshore Energies UK’s proposal to reform the Energy Profits Levy from 2026. This tax is not fit for purpose and is damaging UK business investment and jobs, which means lower revenues to the Exchequer. The UK is the only country that continues to levy a windfall tax on energy profits, where there is no windfall left to tax. We must reset this tax so firms have the confidence to build our integrated energy future at home rather than looking overseas.”
Katy Heidenreich, OEUK’s director of supply chain and people comments: “This survey underlines that the Energy Profits Levy isn’t working for government, industry or consumers and needs urgent reform. The government’s Office for Budget Responsibility has revised down its forecast revenue from £41.6bn in November 2022 to £17.4bn for the period 2022-23 to 2027-28. This is less than half what was forecast. But if this tax is reformed as OEUK proposes, the sector can add £137bn to the economy by 2050, secure £41 billion of extra investment in UK energy by 2050, support 23,000 additional jobs by 2030 and unlock £12 billion in additional tax receipts by 2050. So, it’s not just offshore energy firms, our industrial heartlands and their skilled people that need this tax to change – it’s the whole economy.”