Industry levy

In October 2015, following consultation with the industry, an industry levy was introduced to fund the OGA (now known as the NSTA), in line with the established principle across regulation and service delivery of ‘user pays.’ The NSTA recovers its costs from the companies that benefit from its services.

The levy for 2022-23 is £32.9m. Offshore licensees will be notified of the exact levy due for their licences.

There is a two-tier levy mechanism with the annual levy apportioned between pre-production (11%) and in-production (89%) licence holders, based on an assessment of the costs that the NSTA occurs in relation to each group. This apportionment is regularly reviewed to ensure it remains appropriate.

For the purposes of the levy, we consider ‘producing’ licences to be those licences to which the NSTA has given consent to start production, i.e. where the licence has an approved Field Development Plan. Exploration licence holders and licence holders with no approved Field Development Plan are subject to a lower ‘non-producing’ levy rate. Additionally, the NSTA is allowing a ninety or eighty per cent discount on some ‘Promote’ licences and ‘Innovate’ licences in Phase A or B of their initial term, if held by companies which qualify as micro-businesses.

The legislation for the 2022-2023 Levy, along with details on levy-rates and liability to pay

The levy does not currently apply to the onshore sector.

Over 99% of the levy of £30.2m for the financial year 2021-22 was collected. An underspend of the levy received in 2020-21, totalling £3.2m has been paid back to the industry during the 2021-22 financial year.

The NSTA remains very focused on delivering a high-quality service and providing value for money to the industry. We are committed to setting the levy in a fair and transparent manner and our intention is to reduce the running costs of the NSTA over time.

The levy rates for the 2022-23 financial year are as follows:

Licence Category 2022-23 Levy
Microbusiness & Promote/Innovate Phase A Licensee (Non-Producing) £ 1,778
Microbusiness & Innovate Phase B Licensee (Non-Producing) £ 3,556
Other Non-Producing and Innovate Phase C Licensee £ 17,781
Producing £ 121,930
Exploration Licence £ 17,781