More than £2billion of North Sea investment has been put on hold by Harbour Energy because of the UK’s windfall tax on oil and gas profits, the company’s chief executive has revealed.
Linda Cook warned the tax – which has pushed the overall burden on producers to around 78% – is diverting capital overseas and threatening further job losses across the sector.
The comments come as Aberdeen energy veteran Sir Ian Wood called on Chancellor Rachel Reeves to move quickly to scrap the “unfair and punitive” levy after signalling to industry leaders that it could be replaced with a new fiscal regime.
Speaking to Dow Jones, Cook said the EPL is damaging domestic energy production and increasing the UK’s reliance on imports at a time of heightened geopolitical risk.
Harbour Energy has already cut around 700 roles since the levy was introduced and said additional reductions could follow if investment remains constrained.
The levy was introduced in May 2022 following the surge in energy prices triggered by Russia’s invasion of Ukraine and added an additional 38% charge on oil and gas profits.
Harbour Energy said the current regime makes UK projects far less attractive than those elsewhere. The company recently completed a $3.2billion acquisition of US-based LLOG Exploration, where tax rates are significantly lower.
Cook added that ending the levy would allow the UK to make better use of its own natural resources while supporting jobs and investment across the energy supply chain.
Sir Ian Wood said recent global tensions have underlined the importance of domestic production.
“The Chancellor’s willingness to end the unfair and punitive Energy Profits Levy is welcome,” he told the Press & Journal today.
“It has and remains a position of common sense to support oil and gas to protect jobs, reduce our reliance on carbon heavy imports and generate greater domestic economic and energy security until such time renewables are available commercially and at scale.”
He urged the government to move quickly to replace the EPL with its proposed Oil and Gas Price Mechanism, arguing that a stable long-term policy framework is essential if the North Sea is to attract the billions of pounds of investment needed to sustain the basin and its workforce.