Harbour Energy, the largest oil and gas producer in the UK North Sea, is to cut another 100 offshore jobs following a review of its British operations, warning that the government’s fiscal policies have made the region uncompetitive for capital investment.
The FTSE 100 company announced today that it has launched a consultation process regarding the redundancies, which are expected to conclude in the first quarter of 2026. The move comes as the operator adjusts to a shrinking domestic footprint, accelerated by the UK government’s decision to maintain the Energy Profits Levy (EPL), or “windfall tax,” which pushes the headline tax rate on North Sea producers to 78%.
The cuts are the latest in a series of retrenchments by Harbour, which has already reduced its UK workforce by approximately 600 roles since 2023.
The company previously announced 250 jobs were to go in May this year.
Scott Barr, managing director of Harbour’s UK business unit, attributed the restructuring to a combination of market conditions and the fiscal environment.
“The offshore reorganisation is a necessary step to align our operating model with reduced activity and production levels in the UK, accelerated by the retention of the EPL, while maintaining our commitment to safety and regulatory standards,” Barr said.
He added a stark warning regarding the future of the company’s British assets: “Harbour’s UK Business Unit will continue to struggle to compete for capital within our global portfolio while the EPL remains.”
Fiscal headwinds
The announcement follows Chancellor Rachel Reeves’s Budget statement last Wednesday, which offered no relief to the sector. The government confirmed it would retain the EPL – originally introduced in 2022 to capture profits from surging energy prices – until March 2030. When combined with the 40% corporation tax rate, the 38% levy results in a total tax burden of 78%.
Harbour Energy has been a vocal critic of the regime. In its recent financial reporting, the company revealed an effective tax rate of over 100% for a recent period, caused by deferred tax charges linked to the levy’s extension.
The contraction at Harbour mirrors a wider trend across the North Sea basin. Industry body Offshore Energies UK (OEUK) has warned that the current tax levels could wipe out tens of thousands of jobs and cost the UK economy billions in lost investment.
While the government signaled on Wednesday that it would permit some new production near existing infrastructure – easing a total ban on new licenses – operators argue that without fiscal stability, the economics of mature basin recovery remain broken.
Harbour’s consultation on the 100 roles is the latest evidence that the “review” of its UK business, promised when the tax hikes were first mooted, is now shifting from analysis to implementation.
Andrew Bowie, shadow energy security minister and shadow secretary of state for Scotland. commented:
“This is appalling news for hard-working families ahead of Christmas.
“It would be bad enough if this was an isolated incident. But this is happening week after week as the sector grapples with the Labour government’s war on oil and gas.
“The 2030 extension to the EPL is directly responsible for the Harbour announcement today. No further evidence is needed. The EPL has not just overstayed its welcome in the North Sea. It is choking the life out of it.
“Labour haven’t brought down bills. They haven’t brought jobs to Aberdeen. They won’t even make much money from supertaxes on the North Sea. They’ve only caused a wave of redundancies in the North East.
“It is time for Keir Starmer and Ed Miliband to make a u-turn on this anti-growth, anti-energy security policy which is wrecking the North Sea.”
