Jersey Oil & Gas plc said it will carefully consider the impact of the changes to the Energy Profits Levy on its Greater Buchan Area project, northeast of Aberdeen in the Outer Moray Firth
IMPLICATIONS
On 29 July, the Government announced that the EPL will increase to 38% from 1 November 2024, bringing the headline rate of tax on upstream oil and gas activities to 78%.
The levy will be also extended to 31 March 2030.
The Government added it would remove “unjustifiably generous” investment allowances from the EPL by abolishing the levy’s main 29% investment allowance for qualifying expenditure incurred on or after 1 November 2024.
It will also reduce the extent to which capital allowances can be taken into account in calculating levy profits.
Chancellor of the Exchequer Rachel Reeves is expected to announce further details in the Budget in October.
JOG said the GBA joint venture would review the effect of the tax changes on the economics and sanction of the project.
“The full implications will, however, only be clear when the level of capital allowance claims available as deductions to the EPL are provided in the October Budget,” the company added.
Partners include operator NEO Energy with 50% and Serica Energy (UK) Ltd holding 30%.