Chevron Halts North Sea Drilling Amid Rising Tax Burden
US energy giant Chevron has ceased its North Sea operations after UK Chancellor Jeremy Hunt rejected calls to pause the windfall tax on energy companies. This decision ends Chevron's 55-year presence in the region. The company cited a global review of its operations, ensuring competitiveness, as the reason for withdrawal, denying any direct link to current UK tax laws.
US energy giant Chevron has ceased its North Sea operations after UK Chancellor Jeremy Hunt rejected calls to pause the 'windfall' tax on energy companies.
This decision ends Chevron's 55-year presence in the region.
The company cited a global review of its operations, ensuring competitiveness, as the reason for withdrawal, denying any direct link to current UK tax laws.
Chevron will divest assets including the Ninian Pipeline, Sullom Voe Terminal, and Shetland Islands Regional Gas Export pipeline.
The windfall tax, targeting oil and gas extraction profits, can result in tax rates as high as 75%, with some companies like EnQuest facing rates up to 113%.
Industry leaders warn that this tax regime could halve UK oil and gas supply by the decade's end, potentially leading to an energy crisis before sufficient renewable infrastructure is in place.
Despite this, the UK government maintains its support for the sector, emphasizing the tax's role in encouraging investment.
Other energy firms, such as Shell, Harbour Energy, and BP, have also scaled back North Sea operations due to the tax.