UK signals readiness for oil & gas tax shift with £50 billion energy investment in play

March 5, 2026, by Melisa Cavcic

Britain’s trade body for the offshore energy industry, Offshore Energies UK (OEUK), has taken steps to engage in talks with the UK government to strike a deal and unlock multibillion-dollar energy industry investment boost by replacing the energy profits levy (EPL). The proposed regulatory shift has the potential to pave the way for homegrown energy growth, fortifying energy security and tax revenues, which are set to rise as the oil and gas windfall tax replacement looms.

Illustration; Source: Offshore Energies UK (OEUK)

Offshore Energies UK’s Chief Executive Officer (CEO) and industry leaders met Rachel Reeves MP, Chancellor of the Exchequer, on March 5, 2026, at Number 11 Downing Street to lay out the steps to reform of the EPL this year. The Chancellor has asked the Financial Secretary and officials to work with industry on delivering long‑term fiscal certainty, including clarity around the ESIM, while jointly navigating the current period of geopolitical volatility.

OEUK claims that those present agreed energy security is national security, and a stable, predictable investment environment is essential to delivering it. As a result, they decided to working together in the coming days to set out a path toward a fiscal regime that supports responsible domestic oil and gas production, unlocks investment, and ensures fair return to the Treasury when prices are high.

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David Whitehouse, Chief Executive of OEUK, commented: “At a time of huge global uncertainty, the UK should be making decisions for the long term in the interests of energy security, prioritising domestic production of oil and gas and supporting jobs. This fundamental need has been brought into sharp focus by recent events. Today’s meeting with the Chancellor followed weeks of in-depth discussions with industry, which took place at the instigation of the Treasury.

“The government has committed to work with us in the coming days to find a solution to replace the Energy Profits Levy so industry can make investments in homegrown energy. This will enable greater energy security, tax revenues and growth for the UK economy.”

The meeting closed with a commitment to work together to safeguard Britain’s energy and jobs, strengthen supply chains, and secure affordable, homegrown energy for the long term. An investment of approximately £50 billion ($66.74 billion) is at risk if no changes are made to the fiscal regime.

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Whitehouse continued: “On the basis of this proposed change our members identified additional investment in the UK Continental Shelf (UKCS) that could begin next year. And this is just the first step. The industry is ready to invest up to £50 billion in new activity by 2050 with a functioning regulatory regime.

“We welcome that the Chancellor recognised the need for the EPL to end and appreciated her time to discuss these issues in person, during which North Sea operators reaffirmed their unwavering commitment to reducing our reliance on imports and bolstering UK energy, economic and national security at a time of geopolitical crisis.”