NEO Energy Delays Investment in Buchan Project

NEO Energy has announced a slowdown in investment across its portfolio, including the significant Buchan Horst project in the North Sea, due to increased fiscal and regulatory uncertainties. The UK government's recent decision to raise the Energy Profits Levy from 35% to 38% and new environmental guidelines requiring comprehensive assessments of Scope 3 emissions have created a challenging investment climate. The Buchan project, which was expected to begin production in 2027, now faces delays as NEO awaits clarity on the regulatory framework. The Offshore Petroleum Regulator for Environment and Decommissioning has also deferred environmental statement assessments pending a consultation that will conclude in spring 2025. This uncertainty has been exacerbated by a Supreme Court ruling that necessitates considering emissions from burning fossil fuels in project assessments. Industry experts predict that these changes could lead to a substantial reduction in state revenue, estimated at £12 billion.