Big Oil to Meet With UK Chancellor Over Windfall Tax

UK Chancellor of the Exchequer Jeremy Hunt will meet with top North Sea oil and gas producers on Friday to discuss an expansion of a windfall tax on the industry.

The meeting will include representatives from oil majors Shell Plc, BP Plc and TotalEnergies SE as well as independents like Harbour Energy Plc and Neptune Energy Group Ltd., according to people familiar with the matter who asked not to be identified.

Hunt earlier this year increased a windfall tax on profits for the sector to 35%, from 25%, and extended it to 2028 to help subsidize energy bills that have soared on natural gas prices. Some companies are urging the government to include a price floor in the mechanism so that if oil and gas prices fall, the windfall tax wouldn’t apply.

Since Hunt announced the tax plan on Nov. 17, Brent oil prices have declined roughly 13%, though are still above historical averages. 

The windfall measure is set to raise more than £19 billion ($23 billion) through 2028, according to Treasury projections. Industry group Offshore Energies UK has warned that the measure is set to stifle investment in fossil fuel production that could improve energy security.