Hurricane Energy is the latest company to raise concerns about the impact of the new windfall tax on oil and gas producers in UK waters.

The controversial cash raid is being imposed to partly fund support to help Britons with the rising cost of living.

It was the end of May when the Government made its announcement on an energy-price levy (EPL), which has caused unease in the offshore oil and gas sector.

Hurricane said yesterday: "As the full details and related legislation of the EPL have not yet been published, it is not yet possible to determine the full impact this will have on the company.

"As the EPL includes an investment allowance, should the company decide to invest in further development on its existing assets or development on assets following an acquisition, such investment would partially offset the EPL charge."

Hurricane chief executive Antony Maris pointed out that the oil and gas industry works within a framework of long investment cycles and highly-volatile commodity markets.

EPL 'unhelpful'

He added: "Fiscal stability is key in supporting the investment decision making to meet the UK's energy transition targets and the introduction of the EPL is unhelpful in that regard. However, as a potential investor in future UK oil and gas assets, we also stand to benefit from investment incentives/relief."

Just last week, the boss of the largest UK listed independent oil and gas company called on the Chancellor to limit the potential length of the new tax.

Linda Cook, chief executive of Harbour Energy, has warned the levy will result in less capital being available for companies to invest in the basin - and create a more fiscally unstable environment.

The Government has said the new tax will remain in place until oil and gas prices return to historically more normal levels or the activation of a "sunset clause" in 2025.

This has led to fears that, unless the prices of hydocarbons fall sharply, it could turn into a multi-year levy which could cost the offshore industry up to £17.5billion.

CEO Ms Cook has written to Chancellor Rishi Sunak setting out, in detail, Harbour Energy's concerns over the EPL.

Disproportionate impact

popShe added: "I have argued that the EPL, as currently proposed, disproportionately impacts the independent oil and gas companies which have recently invested the most to help ensure UK domestic-energy supply.

"It will result in less capital being available for companies to invest in the North Sea, for both oil and gas and energy-transition projects, as well as creating a more fiscally-unstable environment for those investments.

"My letter also put forward several suggested revisions to the Treasury, which I urged them to adopt to protect investment and mitigate the long-term damage of the EPL - including allowing the offset of tax losses from past investment; no exclusion of decommissioning spend for EPL purposes; and a change to the sunset clause to the end of 2023, in line with when oil and gas prices are forecast to return to more normal levels."

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