The recently-approved Rosebank oil field in the North Sea has been touted as a way to boost the UK economy and its energy security. But even with its windfall tax on energy company profits, the project is a good example of how the UK could miss out on billions in taxes over the life of an oilfield.
Energy companies Equinor and Ithaca expect to invest £8.1 billion in Rosebank from development, during its operation and when they decommission the field once they’ve finished extracting its oil. Of this, 78% will be invested in UK-based businesses, and the project will support 1,600 jobs at the height of construction and around 450 UK-based jobs over its entire lifetime.
The UK charges a headline 75% rate of tax on all UK energy production and so, at first glance, a major project like Rosebank would be expected to generate billions in tax payments for the UK Treasury over the years. But, according to my research, it could instead create billions in tax savings for the companies involved.
