Harbour Energy is set to cut 350 jobs as its shifts investment away from the UK due to the windfall tax on the industry.
The Scottish company, the largest oil and gas producer in the North Sea, last month said its profits were ‘all but wiped out’ by the levy.
It has now told staff that 350 onshore jobs will go, mainly in Aberdeen.
Harbour Energy has said 350 onshore jobs will go, mainly in Aberdeen.
Prime Minister Rishi Sunak introduced a 25pc profits levy on the industry when he was chancellor as energy prices soared following Russia’s invasion of Ukraine in February 2022. This was later raised to 35pc.
Harbour boss Linda Cook said the tax, which effectively imposes a 75pc corporate tax rate on profits made from the North Sea, ‘disproportionately impacted’ UK- focused oil and gas firms.
Harbour reported an after-tax profit of just £6.7m last year, down from £85m in 2021, due to what it said was a £1.3bn charge linked to the windfall tax.
Yesterday it said: ‘As a result of the energy profits levy, which results in an effective tax rate of 75pc in the UK regardless of the level of oil and gas prices in the market or realised, we have had to reassess our future activity level in the UK.
‘At our full-year results in March, we explained this would lead to a significant reduction in our UK workforce. We are working hard to mitigate the impact of this. We are very conscious of the impact of this news on our people, and we are carrying out the review fairly and with consideration for everyone affected.’
Energy firm Enquest also took a swipe at the windfall tax, suggesting the levy caused delays at its North Sea production site.
The firm said it would hold back on further drilling in 2023 because of the higher tax rate changing the investment econom- ics. Amjad Bseisu, Enquest’s chief executive, said: ‘With no energy profits levy, that would have been economic. But we probably need a third more volumes to make it economic now because we have the burden of a third of the cash flow going to the levy.’
A Treasury spokesman said: ‘The energy profits levy strikes a balance between funding cost of living support from excess profits while encouraging investment in order to bolster the UK’s energy security.
‘We have been clear that we want to encourage reinvestment of the sector’s profits to support the economy, jobs, and our energy security, which is why the more investment a firm makes into the UK, the less tax they will pay.’
#fiveDealsWidget .dealItemTitle#mobile {display:none} #fiveDealsWidget {display:block; float:left; clear:both; max-width:636px; margin:0; padding:0; line-height:120%; font-size:12px} #fiveDealsWidget div, #fiveDealsWidget a {margin:0; padding:0; line-height:120%; text-decoration: none; font-family:Arial, Helvetica ,sans-serif} #fiveDealsWidget .widgetTitleBox {display:block; float:left; width:100%; background-color:#af1e1e; } #fiveDealsWidget .widgetTitle {color:#fff; text-transform: uppercase; font-size:18px; font-weight:bold; margin:6px 10px 4px 10px; } #fiveDealsWidget a.dealItem {float:left; display:block; width:124px; margin-right:4px; margin-top:5px; background-color: #e3e3e3; min-height:200px;} #fiveDealsWidget a.dealItem#last {margin-right:0} #fiveDealsWidget .dealItemTitle {display:block; margin:10px 5px; color:#000; font-weight:bold} #fiveDealsWidget .dealItemImage, #fiveDealsWidget .dealItemImage img {float:left; display:block; margin:0; padding:0} #fiveDealsWidget .dealItemImage {border:1px solid #ccc} #fiveDealsWidget .dealItemImage img {width:100%; height:auto} #fiveDealsWidget .dealItemdesc {float:left; display:block; color:#004db3; font-weight:bold; margin:5px;} #fiveDealsWidget .dealItemRate {float:left; display:block; color:#000; margin:5px} #fiveDealsWidget .dealFooter {display:block; float:left; width:100%; margin-top:5px; background-color:#e3e3e3 } #fiveDealsWidget .footerText {font-size:10px; margin:10px 10px 10px 10px;} @media (max-width: 635px) { #fiveDealsWidget a.dealItem {width:19%; margin-right:1%} #fiveDealsWidget a.dealItem#last {width:20%} } @media (max-width: 560px) { #fiveDealsWidget #desktop {display:none;} #fiveDealsWidget #mobile {display:block!important} #fiveDealsWidget a.dealItem {background-color: #fff; height:auto; min-height:auto} #fiveDealsWidget a.dealItem {border-bottom:1px solid #ececec; margin-bottom:5px; padding-bottom:10px} #fiveDealsWidget a.dealItem#last {border-bottom:0px solid #ececec; margin-bottom:5px; padding-bottom:0px} #fiveDealsWidget a.dealItem, #fiveDealsWidget a.dealItem#last {width:100%} #fiveDealsWidget .dealItemContent, #fiveDealsWidget .dealItemImage {float:left; display:inline-block} #fiveDealsWidget .dealItemImage {width:35%; margin-right:1%} #fiveDealsWidget .dealItemContent {width:63%} #fiveDealsWidget .dealItemTitle {margin: 0px 5px 5px; font-size:16px} #fiveDealsWidget .dealItemContent .dealItemdesc, #fiveDealsWidget .dealItemContent .dealItemRate {clear:both} }
This post first appeared on Dailymail.co.uk
