Harbour Energy, the UK’s largest North Sea oil and gas producer, has announced plans to cut around 250 onshore jobs at its Aberdeen headquarters, citing the UK Government’s “punitive fiscal position and a challenging regulatory environment” as the primary reasons for the decision.
This reduction represents roughly a quarter of the company’s local workforce and follows a previous round of 350 job cuts in 2023.
Harbour Energy’s UK managing director, Scott Barr, stated that the review and subsequent job losses are necessary to align staffing with lower investment levels, which the company attributes mainly to the government’s windfall tax and ongoing regulatory uncertainty.
The Energy Profits Levy, introduced in 2022 and extended by the Labour government, imposes a total tax rate of up to 78% on North Sea oil and gas profits, with Harbour claiming an effective tax rate of 108% last year, leading to post-tax losses of £72 million despite pre-tax profits of £898 million.
Industry and Political Reaction
The announcement has sparked strong reactions across the political and business spectrum. The Aberdeen & Grampian Chamber of Commerce described the cuts as a “devastating blow” and warned of further job losses unless government policy changes, calling the current tax regime a “national scandal” that threatens the future of a world-class British industry.
Trade union Unite also criticised the government, warning that without a managed transition plan for North Sea workers, job losses could escalate into the tens of thousands.
Political leaders have traded blame over the impact of the windfall tax. SNP’s Westminster leader Stephen Flynn accused the Labour government of destroying jobs in Scotland, while Chancellor Rachel Reeves defended the levy as a means to fund essential public services, emphasising that oil and gas will continue to play an important role in the UK economy.
The job cuts come at a time of broader challenges for the UK’s oil and gas sector, with declining investment, falling oil prices, and delays to key projects like Harbour’s Viking carbon capture initiative due to slow government support.
Industry leaders warn that, without a stable fiscal and regulatory environment, more companies may reduce their UK presence or shift focus abroad.
