More than half (55%) of the UK’s offshore energy companies have reduced staff headcount in the past year, according to the latest Pulse Survey from Offshore Energies UK (OEUK). The survey results underpin a key proposal by OEUK to reform the Energy Profits Levy (EPL), which has been submitted to the UK Treasury ahead of the Chancellor's 26 November statement.

The industry group, which represents over 420 companies, claims that the current tax regime is costing the oil and gas sector 1,000 jobs a month—a loss that could be stopped by specific policy changes.

The outlook remains challenging, with nearly half (45%) of surveyed companies expecting further job cuts over the next 12 months if the current policy environment persists. The survey, which polled 97 companies and business units, also reveals a growing trend of firms shifting their focus overseas.

One respondent stated: “We’re now actively looking to reduce exposure to the UK energy industry and move operations overseas, reducing UK economic activity and tax take (personal and PAYE).”

Another warned that the EPL is putting future clean energy efforts at risk: “Ability to provide support to net zero [is] in jeopardy due to rapid decline of baseline hydrocarbon revenues.”

The EPL was repeatedly highlighted as a critical barrier to investment, with one company calling it “the biggest problem we face as an organisation”.

The findings underline the urgent need for a supportive investment climate to protect UK energy jobs and maintain the sector’s contribution to the economy. OEUK’s EPL reform proposals, which centre on a reset of the tax in 2026, are gaining support across the wider business community.

Sheena McGuinness, Co-Head of Energy and Natural Resources at RSM UK, a global audit, tax, and consulting network, commented: “I welcome Offshore Energies UK’s proposal to reform the Energy Profits Levy from 2026. This tax is not fit for purpose and is damaging UK business investment and jobs, which means lower revenues to the Exchequer. The UK is the only country that continues to levy a windfall tax on energy profits, where there is no windfall left to tax. We must reset this tax so firms have the confidence to build our integrated energy future at home rather than looking overseas.”

Katy Heidenreich, OEUK’s director of supply chain and people, highlighted the financial implications for the government: “This survey underlines that the Energy Profits Levy isn’t working for government, industry or consumers and needs urgent reform. The government’s Office for Budget Responsibility has revised down its forecast revenue from £41.6bn in November 2022 to £17.4bn for the period 2022-23 to 2027-28. This is less than half what was forecast. But if this tax is reformed as OEUK proposes, the sector can add £137bn to the economy by 2050, secure £41 billion of extra investment in UK energy by 2050, support 23,000 additional jobs by 2030 and unlock £12 billion in additional tax receipts by 2050. So, it’s not just offshore energy firms, our industrial heartlands and their skilled people that need this tax to change – it’s the whole economy.”