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North Sea oil and gas producers want an urgent meeting with new Chancellor Nadhim Zahawi on the controversial windfall tax.

Trade body Offshore Energies UK (OEUK) has now written to Mr Zahawi, who took over from Rishi Sunak on Tuesday night.

The group has several requests on modifying the Energy Profits Levy (EPL), which is due to go through parliament on Monday.

OEUK sustainability director Mike Tholen told Energy Voice: "OEUK has been pushing for changes to the EPL and we are pleased to have got three key changes in the amended legislation."

Among the concessions from the Treasury are inclusion of decommissioning tax rebates, and electrification being included as part of investment incentives for the sector.

The new Chancellor said in an interview yesterday that he's "determined to do more" to cut taxes as he pledged to rebuild the struggling economy amid the worst cost-of-living crisis in a generation.

Mr Zahawi wants Britain to be one of the most-competitive countries in the world for investment.

He said Corporation Tax was the "one tax (investors) can compare globally", adding: "I want to make sure we're as competitive as we can be while maintaining fiscal discipline."

However, there was no mention in the interview on his thoughts on the windfall tax on UK oil and gas companies.

Rishi Sunak met with North Sea producers in Aberdeen last month, and they told him that the new levy - which could cost them nearly £20billion - risks undermining attempts to attract cash to the basin.

It was reported that oil and gas bosses rounded on the then Chancellor over his new windfall tax at their private 40-minute meeting as they stepped up efforts to shape the policy before legislation is passed.

Executives warned that the higher levy on profits will make the UK a less-attractive prospect and was forcing them to rethink investment plans just as the Government tries to boost domestic energy supplies;

'Negative' signal to investors

Shell was said to have described the tax as a "negative" signal to investors.

No-one held back," said one industry source. "Larger companies said it showed the UK was not a stable place."

Another source added: "The Chancellor sort of bounced in bright-eyed and bushy-tailed, and he went out with the tail between his legs. There was annoyance with where things are going."

Although Labour had been pushing for a windfall tax on North Sea oil and gas producers for months, the details of Mr Sunak's levy took the offshore industry by surprise when they were unveiled.

The sector had been expecting a one-off hit, but the extra tax will remain in place until the end of 2025 unless oil prices fall back substantially. This could lead to a £17.5billion drain on the profits of North Sea operators between now and then. The extent of this cash raid could do untold damage to the north-east economy.

And there was further anger recently when it emerged that the new levy will not be applied to electricity generators, with a UK Government source saying: "The direction of travel is away from a windfall tax on generators because the sector is just too complex and it could clobber investment...it turns out it's just too complex to work out who has made how much excess profit."

That comment has puzzled and annoyed the North Sea oil and gas industry, which feels it is being unfairly targeted by the Government while other sectors escape.

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