Oil traders have shown they believe there is lots of money to be made in the North Sea even as industry leaders warn looming tax hikes will devastate the area.
Chancellor Rachel Reeves last month confirmed plans for sweeping changes to the tax regime which Labour included in its manifesto despite warnings from unions that the moves could take a heavy toll on jobs.
The changes include a windfall tax hike that will take the total headline rate paid by oil and gas firms to 78% while the term of the levy has been extended by a year to March 31 2030. The “unjustifiably generous investment allowances” introduced alongside the windfall tax by the former Conservative Government in 2022 will be scrapped from November.
The confirmation appeared to end industry leaders’ hopes that economic realism would prevail and Labour would go easier on the industry than threatened if it won the election.
Trade body OEUK appeared furious. Accusing the Government of confirming the tax plans in a late-afternoon paper without warning, it said the announcement jeopardised jobs in communities across the UK.
“This is something the Prime Minister committed in his manifesto not to do,” complained OEUK chief executive David Whitehouse.
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OEUK is seeking urgent engagement with the Treasury in the hope that it can secure concessions before the Budget is published on October 30.
However, the day after the changes were announced came news of a significant North Sea deal which suggested the prospect of higher taxes did not put some buyers off the area.
Viaro Energy confirmed it had struck a deal to acquire what it described as one of the largest and longest gas producing asset portfolios on in the North........