World’s third largest oil company quits North Sea as Hunt doubles-down on EPL

17/05/2024

THE world’s third largest oil company is selling its assets in the North Sea just days after Jeremy Hunt rejected calls for respite from the Energy Profits Levy (EPL).

The US energy giant Chevron said the decision to leave the region came after a review to determine assets are “strategic and competitive for future capital”.

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The company’s decision to focus on other ventures follows ExxonMobil selling most of its North Sea assets in 2021, meanwhile BP and Shell have reduced their portfolios.

Chevron insists the decision is “not related to recent announcements relating to the UK windfall tax,” and said the timing of the decision is merely coincidental.

It’s understood that energy giants such as BP, Shell and Harbour were around the table with Mr Hunt, who made no promises to make any changes to the EPL and pointed out that Labour’s plans were more of a deterrent to investors.

However, Chris Wheaton, an oil and gas analyst at Stifel, said “the threat of an additional tax is creating a hostile environment for investment [in the UK continental shelf] and Chevron has other assets to invest in”.

The firm previously sold its interest is Rosebank to Equinor in 2018, alongside about $2bn (£1.58bn) of other assets in to Ithaca Energy in 2019.

Chevron also boasts a near-20% stake in the Clair oilfield, worth around $1.1bn (£870m) according to Wood Mackenzie, currently operated by BP. It’s the largest North Sea production with around 120,000 barrels per day.

A Government spokesman said: “No one is backing the oil and gas industry more than the Government. Our annual licensing rounds are supporting around 200,000 jobs, giving them certainty to invest and unlocking billions in tax for our own transition to clean energy.

“The temporary windfall tax on oil and gas firms actively encourages investment to create jobs and grow the economy – the more investment they make the less tax they will pay.”

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