Proactive Investors - Harbour Energy confirmed it is planning cuts to its UK staff numbers following November’s hike in the windfall tax on North Sea oil and gas production.
After the energy profits levy on oil and gas was raised from 25% to 35%, Harbour estimates it faces a US$600mln tax bill for 2022, over twice what it paid in 2021, it said in a statement.
FTSE 250-listed Harbour, the North Sea's largest producer, is now planning hundreds of job cuts among its 1,700-strong workforce, according to reports, with the focus likely to be on its North Sea hub in Aberdeen.
Harbour said that full-year pre-tax earnings would hit US$4.1bn, up from US$2.4bn in 2021, as production output increased to 208,000 barrels a day from 175,000, while revenue is expected to be around US$5.4bn.
Net debt is also set to reduce to US$0.8bn from US$2.3bn in 2021.
Based on those profits, the predicted tax bill is around 14.6%.
Harbour boycotted the UK’s most recent oil and gas licensing round, which took place earlier this week, and will no longer pursue “opportunities” at a TotalEnergies SE (LON:TTEF) operated well in Elgin Franklin, where it has a 19.3% interest.
The oil group added that 85% of its estimated US$1.1bn capital expenditure came from its UK operations, ahead of a review that will see the business aligned “with lower future activity and investment levels in the country”.
“While oil and gas prices have reverted to more normal levels, we still face a tax rate of 75% in the UK due to the recent tax changes, making an investment in the country less competitive,” said chief executive Linda Cook.
“The energy profits levy necessitated a review of our future activity levels in the UK and reinforced our ambition to grow and diversify internationally,” she added.