North Sea Oil Boss Warns UK Tax System Is Pushing Drilling Towards Norway

UK taxes on oil and gas profits have risen from 40% to about 78% in the past three years, prompting several energy companies to consider pulling out of the country.

North Sea gas company Serica Energy is considering pulling out of Britain and establishing itself in Nordic countries such as Norway. I Photo: Serica Energy plc Linkedin

North Sea gas company Serica Energy says it is considering pulling out of Britain and establishing itself in Nordic countries such as Norway, Indrabati Lahiri reported for Euronews.

If this happens, it could be a significant blow to Britain's energy sector, which has seen several offshore energy companies exit the country following steep tax hikes.

Serica Energy currently accounts for between 41,000 and 46,000 barrels of oil per day, as well as about 5% of the gas supply in the UK. The UK's attractiveness as a drilling destination has been declining recently due to the tax increases on UK oil and gas profits.

Now, with UK Chancellor Rachel Reeves hinting that more tax rises could be seen in the upcoming budget, companies have started looking at exit plans from Britain.

For companies such as Serica Energy, which purchases older oil and gas fields in the North Sea and revitalizes them to generate revenue again, Norway is seen as a good alternative to Britain.

This is due to the relative ease of setting up a similar business model in Norway, especially given its huge offshore energy market and strong network of suppliers.