According to Transition Economics analysis commissioned by Uplift, North Sea oil and gas companies are expected to get a ‘windfall’ payment worth £7 billion from the government’s six month energy support scheme, despite making eye-watering profits, adding pressure to calls for a strengthened windfall tax.
If gas prices return to levels seen in September, the amount of taxpayers money flowing to these companies is expected to more than double to over £15 billion.
BP and Shell are each expected to receive between £500 million and £1 billion from the Treasury, depending on the gas price.
Under the Energy Price Guarantee for households and the Energy Bill Relief Scheme for businesses, the government has committed to cover energy costs above a certain unit price for gas and electricity, with the money paid via energy supply companies and electricity generation companies.
Analysis by Transition Economics, commissioned by Uplift, looked at the revenues expected to flow from the Treasury to oil and gas companies operating in the North Sea from these energy support schemes, which are set to run for the six months from October 2022.
Our analysis estimates that this winter, £7.4 billion in revenues will be effectively paid from the UK government to oil & gas companies extracting gas on the UK Continental Shelf, if this winter is a typical winter. This could rise to £15.3 billion, if wholesale prices return to levels seen in September.
- £1,090 million to £2,260 million paid to Total
- £1,030 million to £2,130 million paid to Harbour Energy
- £580 million to £1,210 million paid to Shell
- £500 million to £1,040 million paid to BP.
Our analysis also estimates that government will effectively make a total payment to all oil & gas companies of between £19.8 billion to £42.8 billion if this winter is a typical winter, or between £23.2 billion to £50.1 billion if this winter is a cold winter. These are revenues flowing both to UK North Sea companies, and to companies who export gas to the UK from other countries (such as Norway and Qatar).