Under the new changes, the Energy Profits Levy (EPL) will not be applied if oil or gas prices fall below their 20-year average over a period of several months, according to industry sources briefed on the details.
The Treasury is set to announce the changes, which will be subject to consultations, on Friday morning.
A spokesperson for the Treasury declined to comment.
The government imposed a 25% levy on oil and gas producers in May last year, which was raise to 35% in November, bringing total tax on the sector to 75%, one of the highest in the world.
North Sea producers have urged the government to introduce a price floor to the Energy Profits Levy (EPL), which they warned risked jeopardizing investment in the ageing basin and could cut output just as Britain seeks to boost domestic production.
(Reporting by Bharat Govind Gautam in Bengaluru, Ron Bousso and Alistair Smout in London, editing by Chris Reese and Daniel Wallis)
By Ron Bousso
