Jersey Oil and Gas PLC (AIM:JOG, OTC:JYOGF) said it would assess its North Sea developments when the full extent of tax changes and allowances proposed by Chancellor Rachel Reeves are published in the Budget on October 30.
The Greater Buchan Area joint venture, which includes JOG, will carefully consider the impact of Labour's plans on the economics of the development and project sanction, said the statement.
“The full implications will, however, only be clear when the level of capital allowance claims available as deductions to the EPL are provided in the October Budget," it said.
In the statement, JOG noted that changes announced by Reeves would see the Energy Profits Levy (EPL) rise to 38% from November 1, bringing the headline rate of tax on upstream oil and gas activities to 78%
EPL will also be extended to March 31, 2030, with the Energy Security Investment Mechanism remaining in place meaning the levy will cease to apply if prices fall consistently to, or below, historically normal levels for a sustained period
The EPL's main 29% investment allowance for qualifying expenditure incurred will be removed from November 1.
Capital allowance claims that can be taken into account in calculating EPL profits will be reduced, but JOG noted the extent of the reduction will only be announced in the October Budget following engagement with stakeholders.