The UK’s biggest oil and gas producer has warned Rishi Sunak against toughening the windfall tax on North Sea operators as the Prime Minister finalizes plans for a £40billion raid pounds on the industry.
Harbor Energy has urged the government to “consider carefully” any proposed changes to the Energy Profits Tax, which was introduced earlier this year.
Sunak had hoped to raise £5bn of the windfall tax when he announced the levy in May, but Shell said last week it had paid no windfall tax so far This year. Huge BP profits announced this week prompted renewed calls for a raise.
Sunak and his chancellor, Jeremy Hunt, are now set to raise the tax rate from 25% to 30% and extend it by three years to 2028 and cover electricity generators, the report reported. Times. They hope to raise around £40bn over five years.
Harbor Energy chief executive Linda Cook said shareholders were pushing for the company to invest in other countries due to “uncertainty” surrounding the tax.
“Assessing expected long-term investment returns has become more difficult and investors are pushing for geographic diversification,” she said.
Cook added: “While we fully recognize the significant challenge in the UK to put public finances on a sustainable footing, we urge the government to carefully consider the consequences of any increase or extension of the Energy Profits Tax.”
She said “additional taxes would run the risk of undermining our ability” to invest in measures to boost Britain’s energy security and spend on carbon capture storage projects.
Harbor is the largest oil and gas producer in the UK and has carbon capture projects off the North Sea coast. It also has projects in Indonesia, Vietnam and Mexico.
Cook’s comments came as the company reported revenue of $4.1bn (£3.55bn) in the nine months to September 30. Production increased by 207,000 barrels of oil equivalent per day, up 27% from the same period a year earlier.
He expects his UK tax bill to be around $900 million this year, including $400 million related to energy profits tax. He returned $500 million to shareholders this year.
Cook, who was paid nearly £6m last year, wrote to Sunak earlier this year to argue the windfall tax is “seriously flawed”.
Harbor shares rose 2% to 392p on Thursday, valuing the company at £3.38bn.