THE dissent in the oil and gas industry over windfall taxes is building to a crescendo.
Twenty-four hours after Ithaca Energy warned the energy profits levy was undermining investment in the North Sea, Parkmead Group declared that it has “obvious concerns” over increasing taxation on energy production across Europe. Their comments followed hard on the heels of concerns raised by North Sea giant Harbour Energy, which said the UK energy profits levy has “disproportionately impacted the UK-focused independent oil and gas companies that are critical for domestic energy security”.
Parkmead, led by former Dana Petroleum chief Tom Cross, incurred a windfall tax of £4m in the Netherlands, which contributed to the firm falling to a loss in the six months ended December 31, 2022. The company, which saw its share price fall sharply today, said it has concerns over “high and increasing levels of taxation on primary energy production across Europe, and how that may impact future investment”.
Given the huge worry over energy security that has arisen following the Russian invasion of Ukraine the concerns raised by companies over the effect on investment from windfall taxes should be taken seriously. Households in the UK and Europe have been forced to sustain significantly higher energy bills for many months now, so it is important that governments do not impede any investment that could ease the burden on the cost of living.
On the other side of the coin, it is never a good look for companies to complain about tax when they, in the case of Ithaca and Harbour, are making healthy profits.
Parkmead raised another important point about windfall taxes too; namely that while the tax is “frustrating”, it is designed to help the “Netherlands population in accessing lower-cost, low-carbon energy - an ultimate goal for Parkmead - and why we aim to increase our domestic natural gas output in the region.”
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