After reporting profits of $2.24 billion for 2022, it is hard to imagine there will be too much sympathy for Ithaca Energy.
The company today became the latest major North Sea player to bemoan the effects of the energy profits levy, brought in by the UK Government last year to curb the extraordinary profits oil and gas companies have been making since commodity prices spiked after Russia invaded Ukraine.
Echoing arguments made by Harbour Energy earlier this month, Ithaca has warned that the levy, which has lifted the headline rate of tax on oil and gas company profits to 75 per cent, threatens the ability of companies to invest in the North Sea. Executive chairman Gilad Myerson declared it has engendered “significant fiscal instability” in the industry.
On the one hand, it is a salient point. The fall-out from Russia’s war in Ukraine has brought UK energy security sharply into focus. It became patently clear very quickly following the start of the war that the UK had to act swiftly to boost domestic energy production and ensure it becomes less reliant on expensive energy imports in future. And in the short term at least that will likely necessitate further investment in fossil fuel extraction as the energy from renewable sources is not sufficient to meet the UK’s needs.
Companies such as Ithaca and Harbour argue that the EPL makes the North Sea less attractive to investors, even with generous tax incentives to encourage investment in the area, and say they may turn their attention to other parts of the world.
But while there is a real prospect that this will happen, the amount of profits that oil and gas companies have made in the last year will lead many to think such businesses have enough in the tank to pay a bit more in tax. Especially when they are busy distributing hundreds of millions of dollars in dividends to shareholders.
UK taxpayers have endured a miserable time since energy prices and inflation began to surge last year, and if anyone deserves sympathy it is them – not highly cash generative corporations.
BrewDog's James Watt launches rival to Dragons' Den
BrewDog co-founder James Watt has said he is putting up £5 million of his own money to launch a new start-up funding programme that has been described as a rival to Dragons' Den.
The controversial entrepreneur has teamed up with Crowdcube to allow members of the public to also back the chosen companies in "The Next Unicorn" competition.
Air Canada Edinburgh Airport to Toronto restart
Air Canada is resuming and extending its non-stop service between Edinburgh and Toronto.
Edinburgh Airport said that, starting on June 2 and flying up to daily during the summer peak, the extended service would continue three times weekly into the winter season until January 8 next year, and is currently planned to return in early spring 2024.
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