The UK North Sea oil and gas sector struggled in 2025 due to declining production, uncertainty, and a punitive windfall tax of 78%. The lack of new exploration wells and reduced investments could lead to an accelerated decline, increasing the country’s reliance on oil and gas imports.

The windfall tax, part of the fiscal regime, has been extended until 2030, discouraging investment in the UK North Sea. Industry leaders warn that the high tax rate and lack of incentives will harm the sector, leading to job losses and a decline in production.

Operators in the UK North Sea are turning to mergers to survive the challenging fiscal environment. Harbour Energy recently acquired Waldorf Energy Partners Ltd and Waldorf Production Ltd for $170 million, aiming to navigate the impact of the windfall tax and sustain their position in the basin. French supermajor TotalEnergies is merging its UK business with NEO NEXT to create NEO NEXT+, the largest independent oil and gas producer in Britain. Analysts anticipate more consolidation in the industry, urging government reform. Ineos stresses the need to balance North Sea investment with climate commitments for a cleaner energy future.

Read more at Yahoo Finance: UK North Sea Oil Enters Survival Mode as Investment Dries Up