: Oil giant blames windfall tax as it cuts hundreds of jobs and investment

By Paul Homewood

Now there’s a surprise!

 

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Britain’s biggest oil and gas producer is planning to cut jobs as it scales back investment in response to the North Sea windfall tax.
Harbour Energy told staff in Aberdeen yesterday that they could be at risk of redundancy. It is cutting plans for exploration in light of the energy profits levy imposed in May after oil and gas prices soared in the wake of Russia’s invasion of Ukraine.
The levy increased the effective tax rate in the North Sea from 40 per cent to 65 per cent initially and was increased again to 75 per cent from the start of this year as the government sought to bring in extra income to fund help for consumers.
Harbour Energy, which employs about 1,500 people in Britain, has been one of the biggest critics of the levy and has said that shareholders are pushing for it to invest its money overseas. In December it said it was “reviewing investment levels and company-wide capital allocation” and would not bid for additional licences in the North Sea.
Yesterday it said: “Following changes to the energy profits levy, we have had to reassess our future activity levels in the UK. We will continue to support investment on the many attractive opportunities within our portfolio, but we are scaling back investment in other areas such as new exploration licensing. As such, we have initiated a review of our UK organisation to align with lower future activity.”
Harbour produced the equivalent of 194,000 barrels of oil a day in the North Sea in the first nine months of 2022, accounting for 94 per cent of its total production. It is easily the biggest producer in British waters.

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January 19, 2023 at 11:50AM

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