Total cuts North Sea investment by 25% due to UK excess profits tax
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French oil and gas company TotalEnergies will cut investment in North Sea projects by 25% in 2023 due to a recently raised UK excess profits tax. He announced this in an interview with energy voice the head of the British division of TotalEnergies, Jean-Luc Giziou. The company previously planned to invest £400 million ($490 million) in such projects next year, which means they will decrease by £100 million.
In November, the UK decided to raise taxes on excess profits of oil and gas companies from 25% to 35%. Under these rules, companies will only be able to tax certain investments, including those in new oil and gas projects and some projects aimed at reducing greenhouse gas emissions. Mr. Gizyu, among other things, noted that there is no mechanism in the law on excess profits that would react to a decrease in energy prices, although these prices are very unstable.
Analysts estimate that after the increase, total taxes for oil and gas companies in the UK reach 75%, one of the highest levels in the world. Earlier, energy companies Shell and Equinor also said they would have to revise their investment plans due to the tax increase.
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