North Sea projects on hold over Labour windfall tax fears

Sir Keir Starmer

NORTH Sea operator Hartshead Resources has warned of possible delays to a new UK gas project due to Labour announcements on the windfall tax.

Hartshead holds a 40% stake in a series of North Sea fields, including the Anning and Somerville developments in the Southern Gas Basin, but said there was uncertainty in the UK gas sector due to changes in the Energy Profits Levy (EPL) proposed by the Labour Party.

Subscribe to our daily newsletter

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

Labour has proposed increasing the existing energy profits levy by three percentage points to 78% as part of a “proper” windfall tax on oil and gas companies.

The policies, announced as the party scrapped a plan to spend £28billion a year on green initiatives, would also cut investment allowances, ban new drilling licences and extend the windfall tax by a year to 2029/30.

Hartshead said “given that the Labour Party are currently significantly ahead in polling”, with UK elections due to be held this year, the company is “presently assessing project economics associated with the proposed Labour party tax changes”.

The firm’s chief executive, Chris Lewis, said: “The danger is that these proposals will cause a flight of capital to other jurisdictions, decimate the skills and supply chain required for the UK to lead the energy transition and result in the loss of tens, if not hundreds of thousands of jobs.

“We are working with industry bodies, industry partners, contractors, unions, MPs and other stakeholders to understand the precise plans and to highlight the danger of damaging and self-defeating policy.”

The latest stories