Britain's recent increase in a windfall tax on the oil and gas sector has pushed Harbour, the UK North Sea's biggest oil and gas producer, to review its capital allocation plans and shun an ongoing licensing round in the basin.
Britain's first oil and gas exploration licensing round since 2019 is running until Jan. 12, as Britain's government looks to boost domestic hydrocarbon output as Europe weans itself off Russian fuel.
The round's launch in October was followed, however, by the government hiking a windfall tax on oil and gas producers in November, prompting the industry to say investments would slump if the tax is not amended.
"As a result of the extension of the energy profits levy... we are reviewing investment levels and company-wide capital allocation," a Harbour Energy spokesperson told Reuters on Thursday. "This review is ongoing and, in the meantime, we have decided not to submit bids as part of this licensing process."
Harbour will focus on growth opportunities within its existing portfolio, the spokesperson added.
Mike Tholen, the deputy director of Offshore Energies UK (OEUK), the main industry association for oil and gas producers, said "short-term thinking about policies, especially taxation policies, can have long-term consequences for the industry which will eventually backfire on consumers and the country."
"There is still time to turn this policy around."
The licensing round has been criticised by climate activists including Greenpeace which is preparing a legal challenge against it.
(Reporting by Shadia Nasralla and Ron Bousso; Editing by Kirsten Donovan)
Related:
Subscribe
