Post-EPL: is there a Phoenix in the ashes of the UK upstream sector?

The UK oil and gas sector is paralysed by the ongoing fiscal and regulatory uncertainty. Unable to model or benchmark investments, and struggling to attract capital, operators and stakeholders are actively diversifying their portfolios away from the UK. It’s a strategy and planning nightmare. The scenarios are endless, and the bookends of best versus worst case are very far apart. The next piece of the puzzle will fall into place on 30 October when the government’s budget statement will provide clarity on near-term tax rates and allowances. We don’t expect much will be said about the government’s successor to the deeply flawed Energy Profits Levy (EPL), but what if bygones become bygones? What if a consensus is quickly reached on what that successor is, industry is unshackled and investment in oil and gas resumes in an environment of trust and fiscal certainty? Could the UK North Sea recover from the post-EPL ashes and what might that look like?