One of the UK’s biggest oil and gas producers is planning to retrench from the North Sea as the Government prepares to hike tax on companies which operate in the area.
Harbour Energy has put its stakes in the Armada, Everest, Lomond, Catcher, and Tolmount fields up for sale to cut its exposure to the area, news agency Reuters has reported, citing sources with knowledge of the matter. It comes as Chancellor Rachel Reeves prepares to increase the energy profits levy – popularly known as the windfall tax – on the sector in the Budget on Wednesday (October 30).
The levy was introduced by the previous UK Government in May 2022 in response to the extraordinary profits that North Sea oil and gas companies began to make in the aftermath of Russia’s full-scale invasion of Ukraine, which caused global gas prices to spike.
Read more:
- Glasgow estate agent Corum reveals move into lettings market
- 'Pivotal moment' nears for Scottish hospitality industry
- Rettie boosts team in Glasgow's 'buoyant' southside
After taking power in July, the Labour Government pledged to increase the rate of the levy to 38% from 35% from November, lifting the headline rate of tax on upstream oil and gas activities to 78%. It also plans to extend the period over which the levy applies to March 31, 2030, and remove some of the investment allowances originally brought in alongside the tax.
Industry players have become increasingly vocal about the impact of the policy, with Aberdeen & Grampian Chamber of Commerce warning earlier this month that confidence in the sector has plunged to an “all-time” low. Its chief executive Russell Borthwick declared that Prime Minister Sir Keir Starmer’s plans for the energy profits levy are having a “chilling effect on the sector”.
Harbour has been a vocal critic of the windfall tax since day one, and slashed hundreds of jobs following its introduction in 2022.
As well as a sale of North Sea assets, Reuters reported that Harbour was resurrecting plans to acquire a listed company in the US to allow it to move its listing and headquarters across the Atlantic from London.
Harbour declined to comment on the sale process when contacted by Reuters, telling the agency that it was focused on integrating Wintershall DEA, which it acquired earlier this year.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel