: Oil giant blames windfall tax as it cuts hundreds of jobs and investment
By Paul Homewood
Now there’s a surprise!
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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NOT A LOT OF PEOPLE KNOW THAT 
Well nobody saw that coming did they?
The idiots running the countries economy see nothing coming when they massively interfere with industrial taxation to support their twisted views on the environment and global warming. They will not be satisfied until they have completely trashed our economy and our way of life, sending us into the realms of a third rate nation. The term ‘common sense’ does not rest with any political party these days.
Not only “industrial”. Look at all the taxes they have increased and invented for ordinary people to support their twisted views.
UK politicians cannot even blame the EU any longer. The madness is homegrown and should have stopped and been reversed immediately following the infamous Brexit.
>>massively interfere with industrial taxation to support their twisted views on the environment and global warming
Instead of openly declaring a War on Fossil Fuels and destroying pipelines like Brandon did in the U.S., the UK is going to tax these producers into submission. Get ready for a future of very long, very cold, unheated Winters, as they have still not perfected the Magic Unicorns to go along with the windmills and solar panels.
Because for some strange reason, they still think its a vote winner!
I can hear someone Laffering all the way to the poor-house….
By Laffering are you referring to something specific Art Laffer said that applies to this? If so, please forward. All the best, Wm G
I assumed readers would be familiar with his Laffer curve about where excess tax results in lower returns.
Maybe I was being too abstract.
I am very familiar with the Laffer Curve and its revelations of tax revenue collected as a function of tax rates. I understand your comment now. I assume the confiscatory rates imposed on the energy industry were IN FACT to drive them out of production, not a serious attempt to generate increased tax revenue. We are both saying the same thing in different ways. In short, if you want LESS of something, tax it.
It might just be that they are stupid enough to think that the oil and gas companies would just carry on and pay the extra tax, because well as one company ad says ‘It’s what they do’. What they are not able to comprehend is that they can do what they do somewhere else these days.
Taxing a country into prosperity is like standing in a bucket and trying to lift yourself by the handle. Winston Churchill.
A proper Energy Policy would balance the need for private investment with public need for Energy Security. Our politicians appear to lack the basic intelligence required to do anything about it. They condone ridiculous overpricing of wind energy while obstructing reliable sources of energy such as onshore gas, coal and nuclear.
A proper energy policy is impossible as the last 3 years have shown us. Not one “expert” or civil servant foresaw the post-Covid gas price spike, nor the spice following Putins invasion and all then forecast high gas prices for years when in fact they have fallen dramatically. When oil breached $100, everyone forecast $150. In fact it fell. The Economist forecast $5 oil just before it started to climb to $100. And so on. An energy policy requires knowledge of future prices. That requires impossible knowledge.
While no-one can predict the vagaries of the market, it doesn’t take a genius to see that subsidising unreliable wind and solar while obstructing reliable, available, alternatives is stupid.
“And would not bid for additional licences in the North Sea”
Yet the EDP (which is usually cheerleading for Offshore Wind Farms) reports a different story:
https://www.edp24.co.uk/news/23255503.norfolk-gas-oil-sites-attract-interest-industry/
Reading this website articles and comments should be made compulsory for all politicians of whatever leaning.
Every day
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.” [Ronald Regan, 1986]
It is the tax at point of sale that needs drastic reduction ideally scrapping. Look at the tax element of the actual price at the pump.
Do that and we simply get taxed elsewhere.
Better would be to cut the waste in public spending.
Tax on an essential item i.e. petrol and diesel is simply wrong. The _only_ justification for such taxes is that ALL the revenue actually gets spent on maintaining the roads and/or building the still missing ones.
>>Do that and we simply get taxed elsewhere.
You can but wonder how much would be saved by firing all the diversity bunch on the public payroll, followed by the global warming nutters.
This is what FairFuelUK are fighting for, to significantly reduce fuel duty, and the establishment of a fuel pricing watchdog, called PumpWatch.
We are going to tax emissions to get less of them
We tax cigarettes to get less of them.
We tax sugar to get less of it.
What do you mean taxing production means we will get less of it?
Those extortionate taxes on essential items (transport fuels) and “politically incorrect” products mean that people buy fewer (or even none at all of) other products.
The concept of reducing tax and gaining more tax income is a complete mystery to the treasury and government. The Brewers Society showed that a reduction in tax would increase revenue and for once they listened and it proved correct.
Harbour Energy is one of my clients. I wondered why they were dragging their heels over cuurrent software maintenance & technical support renewal. Probably downsizing IT requirements too.
Oil and gas are strategic resources whether the clowns in the HoC and the Civil Service deny for stupid political dogma. By ignoring this fact they become culpable for the avoidable disaster looming. Virtue signaling on NetZero does not feed or keep people warm and satisfied. Bigger Better Greener can never provide a viable economy despite what Gummer and his conflict of interest cohorts say.