The North Sea’s biggest oil and gas producer has underlined how much money firms expect to make in the area even as the Chancellor increased the burden of the windfall tax the firm has bitterly opposed.
Harbour Energy revealed it generated $1 billion (£0.8bn) cash from its operations last year after Jeremy Hunt provoked a storm by announcing in his Budget speech that the term of the tax would be extended.
The move will mean firms will have to pay the 35% surcharge until 2029 rather than 2028.
The decision represented a snub to the industry and to Tory MPs in Scotland, who had pleaded with Mr Hunt to think again after his plans became public before the Budget.
Industry leaders were incandescent last week when trade body OEUK warned the move risked jobs, investment and economic growth.
The change is the latest in a series which started in May 2022 when then Chancellor Rishi Sunak introduced the Energy Profits Levy. The rate was increased from 25% in November that year, when the Government noted that UK oil and gas producers were making extraordinary profits following the surge in commodity prices fuelled by Russia’s war on Ukraine.
The total tax rate payable by North Sea firms is 75% currently.
READ MORE: Failing smart meters scheme subsidises rich as energy bills soar
Harbour Energy has been a prominent critic of the tax from day one. The private equity-backed firm slashed hundreds of jobs in response and claimed the tax wiped out its profits in 2022.
On Thursday the company posted a profit of $32 million profit for 2023, net of a $500m tax provision.
But those numbers reflect the impact of significant non-cash accounting charges and may paint a misleading picture of the performance of Harbour.
The company said it generated $1bn cash last year after making $438 million tax payments in the period “primarily in relation to the UK Energy Profits Levy”. It paid $552m tax in 2022.
Harbour used the cash generated last year to fund........