UK Tax Hikes Drive North Sea Oil Firms to Consider Relocating to Norway

UK taxes on oil and gas profits have surged from 40% to around 78% over the past three years, leading several energy companies to explore exit strategies from Britain.
Serica Energy, a key player in the North Sea oil and gas sector, is now contemplating a move to Nordic countries like Norway due to the UK’s increasingly stringent tax regime. This shift could deal a significant blow to Britain’s energy sector, which has already seen a number of offshore companies leave in response to steep tax increases.
Currently, Serica Energy produces between 41,000 and 46,000 barrels of oil per day and provides about 5% of the UK’s gas supply. However, the UK’s declining appeal as a drilling destination is evident, especially with Chancellor Rachel Reeves hinting at potential further tax increases in the upcoming Budget.
For companies like Serica Energy, which specializes in revitalizing older oil and gas fields in the North Sea, Norway presents an attractive alternative. The country offers a robust offshore energy market, a strong network of suppliers, and a stable business environment. Additionally, Norway’s experience in the oil and gas industry, technological prowess, and favorable double tax treaties with various nations make it a compelling option for firms looking to expand globally.
Serica Energy is also evaluating other North Sea countries as potential relocation sites. David Latin, chairman of Serica Energy, expressed concern about the impact of being a UK-based company, noting significant share price declines compared to international competitors.