Energy giant ‘defers or cancels’ North Sea projects due to windfall tax


ITHACA Energy’s full-year profit slumped by more than 75% as the Energy Profits Levy takes it toll on investment in the UK North Sea.

The energy giant profited $215.6m (£170.65m) in 2023, a huge decrease from the $1.03bn (£816m) made in 2022.

Subscribe to our daily newsletter

Why? Free to subscribe, no paywall, daily business news digest.

Production also fell to around 70,238 barrels of oil equivalent per day (boe/d), but the outlook for 2024 represents another drop to 56,000-61,000 boe/d as a “direct result of the Energy Profits Levy”.

Reporting their 2023 figures on Wednesday morning, Ithaca also said investment has been reduced in near-term projects, including deferred or cancelled projects, at the Greater Stella Area, Montrose Arbroath Area, Elgin Franklin Area and Alba.

Interim Chief Executive Officer and Chief Financial Officer Iain Lewis said progress has been made on Phase 1 of the Rosebank development, but remains concerned about the uncertainty facing the sector.

“I am pleased to share a strong set of financial results for 2023, despite the significant fiscal and political headwinds we have faced in the year,” he said.

“The Energy Profits Levy continues to have a direct impact on investment in the UK North Sea, with projects across our operated and non-operated deferred or cancelled.

“The extension of the Energy Profits Levy by a further year to a sunset date of March 2029, highlights the continued fiscal uncertainty our sector faces.”

Commenting on this morning’s results, Chief Executive of Aberdeen and Grampian Chamber of Commerce Russell Borthwick said: “This further warning about the future viability of North Sea operations should come as no surprise.

“Muddled and plain wrong policy and rhetoric from all sides of the political playing field is risking tens of thousands of jobs across the UK and driving energy investment overseas.

“All in the cause of virtue signalling and dressed up as ‘keeping domestic energy bills low for people’.

“I really would like someone to explain clearly to us how massively increasing imports of gas to meet known domestic demand over the coming decades will deliver low energy prices, keep people in work, help the world towards its climate targets and the lights of the nation on.”

The latest stories