Pressure is mounting on Chancellor Rachel Reeves to revisit the Energy Profits Levy amid fresh talks ahead of the Spring Statement.
Trade publication Upstream has reported “intense” meetings in recent weeks, despite the UK Government’s refusal three months ago to scrap the windfall tax on North Sea profits.
In a letter to the Chancellor, Scotland’s Energy Secretary Gillian Martin warned of growing economic damage.
She wrote: “Prior to the UK Autumn Budget, there were clear warnings from across the energy industry on the necessity of making the transition from the EPL to a fairer and more stable regime as soon as possible.
“These warnings were not heeded. The consequences are being felt for business confidence, jobs and investment across Scotland’s energy sector. These impacts are already being seen, and I fear that they will continue in the weeks and months to come.”
The levy, which pushes the headline tax rate to 78%, has been blamed for job losses, including at Harbour Energy in Aberdeen. Industry body Offshore Energies UK previously said reform could unlock £50billion of investment.
Scottish Conservative MP Harriet Cross also urged action, stating: “This really is a do or die scenario facing the industry at next week’s Spring Statement.
“By the UK Government’s own definition, there are no windfall profits, nor have there been for a number of years, which is why Rachel Reeves must scrap the EPL next week.
“Anything less than this is industrial sabotage and economic incompetence.”
A UK Government spokesman said the EPL will end by 2030, to be replaced by a new “Oil and Gas Price Mechanism”, adding it provides “long-term certainty” and supports “a prosperous and sustainable future” for the North Sea.