Are UK oil companies making huge profits?

Global profits are not the same as UK North Sea profits.

The results of Harbour Energy, a major UK North Sea producer, underline the issue. The company reported record group production of 474,000 barrels of oil equivalent per day in 2025, but still posted a $0.2bn loss after tax after a 106% effective tax rate.

Meanwhile, BP now produces the vast majority of its oil and gas - and therefore its revenue - overseas. Just 5% of its global production came from the North Sea, around 117,000 barrels a day, compared with 2.3 million barrels a day worldwide.

HMRC figures also show that UK oil and gas tax revenues have already fallen from a price-shock peak of £9.0bn in 2022-23 to £4.5bn in 2024-25, as prices and production declined. The OBR expects receipts to fall much further over the rest of the decade.

That is the context often missing from oil company profit headlines. The largest international oil and gas companies report worldwide group results, covering production, trading, refining, retail and other activities across many countries. They are a measure of global company performance, not a measure of the economics of producing from the UK North Sea.

The UK North Sea is a mature, high-tax basin. Reuters has reported that major companies have pulled back from the ageing basin, with assets moving to producers such as Harbour Energy, Ithaca Energy and Serica Energy.

The point is not that oil and gas companies never make large profits. It is that global profit headlines do not settle the question of UK North Sea tax, investment, jobs or domestic production.