The greatest producer of oil and gasoline within the North Sea has reported that the federal government’s vitality income levy (EPL) has “all but wiped out our profit for the year”.
Harbour Energy stated it had “reduced our UK investment and staffing levels” and bolstered its purpose to increase elsewhere because of the hit from the windfall tax.
It has change into one thing of a political soccer throughout the value of dwelling disaster thus far, with opposition events accusing the federal government of not going far sufficient in its efforts to get better prices of its vitality invoice assist for households and companies from extraction corporations’ UK operations.
The likes of Shell and BP have revealed file income on the again of elevated oil and gasoline costs as a result of warfare in Ukraine, although their respective upstream actions increase far past the boundaries of the North Sea.
UK-focused Harbour had warned in January that it was to make head workplace staff in Aberdeen redundant in direct response to the hike within the levy, introduced by Chancellor Jeremy Hunt in November final yr.
It took the EPL price to 35% from 25% however the determination took the efficient tax price on North Sea income to 75% due to the 40% company tax cost already utilized.
However, some funding reduction is granted underneath the levy.
Harbour’s chief government stated the job losses, but to be accomplished, can be “significant” and it was trying to lower prices by $40m this yr.
Its income after tax for 2022 got here in at $8m (£6.7m) as a consequence of a “$1.5bn one off non-cash deferred tax charge associated with the EPL”, the corporate stated.
But shareholder distributions of $553m had been made throughout the yr and it proposed a $100m last dividend which marked a 9% improve in awards throughout the yr.
A brand new share buyback plan value $200m was additionally revealed.
Shares fell 2% on the open.
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Chief government Linda Cook stated: “The UK Energy Profits Levy, which applies irrespective of actual or realised commodity prices, has disproportionately impacted the UK-focused independent oil and gas companies that are critical for domestic energy security.
“For Harbour, the UK’s largest oil and gasoline producer, it has all however worn out our revenue for the yr.
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“This has driven us to reduce our UK investment and staffing levels.
“Given the fiscal instability and outlook for funding within the nation, it has additionally strengthened our strategic objective to develop and diversify internationally.”
Labour is amongst authorities critics urging that the EPL is extra punitive on condition that households and companies are affected by file vitality payments.
Mr Hunt is broadly anticipated to take care of the vitality value assure at its present stage of £2,500 in his finances subsequent week quite than lower the extent of assist from April as had been deliberate.
This is because of a fall in wholesale gasoline prices which has lowered the anticipated value of the monetary help bundle.
Source: information.sky.com”