The decision comes as a direct response to the UK government’s increased windfall tax on energy producers, which Apache deems makes continued investment in the region uneconomical.

The windfall tax, known as the Energy Profits Levy (EPL), rose from 35% to 38% on 1 November 2024, and is set to remain in place until March 2030. The government has also removed the 29% investment allowance, further impacting the profitability of North Sea operations.

Apache, which entered the North Sea in 2003 and holds interests in several fields including Forties, Beryl, and Ness, had already suspended new drilling in the region earlier this year. The company now plans to focus solely on asset safety and integrity until production ceases, oilprice.com reports.

This move follows a trend of oil and gas companies scaling back UK North Sea operations due to the perceived instability of the tax and regulatory regime. Industry leaders warn that reduced investment could increase the UK’s reliance on energy imports.