After warnings the windfall tax would spark an exodus of oil firms from the North Sea the basin won votes of confidence from bitter critics of the levy before Labour threw fat on the fire last week.

While 2023 was dominated by claims that the tax imposed the preceding year would cut returns on North Sea investment to the bone, major players in the area have made clear recently that they still see potential to make lots of money in the area.

Signs of continued enthusiasm were evident in what may have looked like unlikely quarters last month when the supplementary results of the latest North Sea licensing round were announced.

Firms that applied successfully for new acreage included some of the noisiest critics of the tax, which was imposed after the surge in oil and gas prices fuelled by Russia’s war on Ukraine helped firms generate record profits.

The awards were announced days before Labour sparked fury by saying it would increase the windfall tax rate and scrap related allowances if it wins the general election that must be held within months.

The fear is that the prospect of a fresh tax hike may make firms that appeared to be rediscovering their enthusiasm for the North Sea think again although the outlook for investment in the net zero drive looks uncertain.

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Labour announced plans for the windfall tax hike the day after dropping its proposal for a £28bn green investment drive, which it decided had become unaffordable.

Of the 17 companies offered licences in the supplementary round TotalEnergies appears to have done particularly well. The French giant was awarded 10 blocks West of Shetland.

The company hit the headlines in December 2022 after announcing that it would cut North Sea spending by 25 per cent, from £400m. It made the move shortly after the Conservative Government increased the rate of the windfall tax to 35%, from an........

© Herald Scotland