The UK's largest oil and gas producer has said it expects to cut a further 250 jobs in Aberdeen - blaming the policies of the Labour Government.
Harbour Energy said it had launched a review of its UK operations and had to take "difficult steps", blaming regulation and "punitive" measures from Westminster.
Aberdeen and Grampian Chamber of Commerce (AGCC) described the news as a "devastating blow" for the region and has called on the UK Government to end the windfall tax immediately.
And Unite the Union has today joined calls for the UK Government to change path on oil and gas, warning that Labour's North Sea "ideology" was leading to the "unforgivable" destruction of jobs.
Announcing the jobs review, Harbour Energy says it faces excessive taxation which has wiped out profits and undermined investment in its North Sea operations.
Scott Barr, managing director of the firm's UK business, said a review was expected to result in 250 job losses in Aberdeen - about a quarter of its workforce in the city - in addition to the 350 job cuts previously announced.
He said: "The review is unfortunately necessary to align staffing levels with lower levels of investment, due mainly to the government's ongoing punitive fiscal position and a challenging regulatory environment."
'End the windfall tax now'
Russell Borthwick, Chief Executive at AGCC, said: “Labour’s long-term ambitions are laudable, but in the absence of a proper industrial strategy, we are left with policies which are destroying a world class British industry.
“The UK currently has a crippling 78% tax on North Sea oil and gas, all while importing record levels of foreign energy – with higher emissions – tax free.
“The result is 10,000 North Sea jobs lost since the windfall tax was introduced in 2022. That’s 25 Grangemouths. And failure to back CCS projects, like Acorn, is also now putting people out of work.
“It is a national scandal which threatens job losses on a scale not seen in decades. These are the very jobs and skills we need to deliver renewables projects when they are available at scale in the years to come.
“Unlike British Steel, this industry does not need a bailout. It simply needs normality restored to the fiscal environment it operates in. Enough is enough. End the windfall tax now.”
Union anger
Trade unions are also blaming Labour for the job losses, saying the "hostile regulatory environment" created by the ban on new drilling licences is leading to oil and gas operators accelerating decisions "that are destructive to job security and UK energy security".
Unite General Secretary Sharon Graham said: “The announcement by Harbour Energy that further jobs will be lost in Aberdeen is devastating news for the oil and gas sector. It’s crystal clear that UK government policy is driving oil and gas companies out of the North Sea. It is directly leading to thousands of jobs being axed and to decommissioning plans being accelerated years ahead of schedule.”
"Unite fears that the scale of the job losses in the years to come will run in to the tens of thousands unless the UK government changes direction and produces a concrete plan with real jobs for the transition of North Sea workers.”
She added: "Governments need realise that for any just transition to work it needs to be a managed transition that puts the workers at its the centre. The current political ideology of prematurely ending the oil and gas industry without any thought to the impact it has on workers is unforgivable.”
Political response
The issue was raised at Prime Minister's Questions, with SNP Westminster leader Stephen Flynn accusing Sir Keir Starmer of "destroying jobs in Scotland".
He said: "Prior to the election the Prime Minister promised that energy bills would come down. They continue to rise. He promised that he would save the refinery at Grangemouth. It is shut. And of course he promised he would unleash a generation of secure energy jobs in my city of Aberdeen.
“Well today, Harbour Energy, the largest independent player in the North Sea, have announced that they're about to shed their workforce by 25 per cent. That's 250 jobs in my constituency gone in the blink of his eye and do you know who they blame Mr Speaker? They blame the policies of the Labour Party.
“So can I ask the Prime Minister, in fact can I invite the Prime Minister, to come to Aberdeen and explain to my constituents why he is willing to move heaven and earth to save jobs in Scunthorpe while destroying jobs in Scotland?”
The prime minister replied that Labour has committed £200million to the Grangemouth oil refinery in Scotland, and accused Mr Flynn of attempting to distract from the SNP's "disastrous" record. He did not mention Aberdeen in his response.
The Conservative leader Kemi Badenoch also raised the Harbour Energy job losses, asking the prime minister why is he shutting down the North Sea rather that getting our oil and gas out of the ground and making energy cheaper.
Reform leader Nigel Farage said: "The idiotic destruction of Scottish jobs is the fault of Tory and Labour governments. Reform will let the North Sea blossom."
A UK Government spokesperson said: "Our thoughts are with any workers affected by this commercial decision, and we will do everything in our power to support workers and communities.
"The government has reformed the Energy Profits Levy to support investment and give industry certainty and stability."