North Sea oil and gas producer, Ithaca Energy, has decided to drastically cut its production in the UK due to the adverse effects of a windfall tax.

The company revealed that the Energy Profits Levy (EPL) has compelled them to defer and even cancel certain projects slated for 2023 and 2024.

Anticipating a decline in production next year, Ithaca expressed concern over the hindered investments across the UK North Sea, with many operators delaying or scrapping projects in response to the fiscal climate.

Ithaca said: “In the meantime, until the fiscal regime is improved, as a direct result of the EPL, investment across our operated and non-operated portfolio has and will reduce, including the deferral and cancellation of certain 2023 and 2024 projects, impacting medium-term production outlook, with production in 2024 expected to be lower than 2023 levels.”

Gilad Myerson, Ithaca’s Executive Chairman, commented: “We continue to constructively engage with the UK Government to highlight the impact of the current fiscal regime to the industry’s outlook and to the UK Government’s stated energy security and net zero ambitions.”