Oil and gas firm EnQuest warned that Labour’s windfall tax is killing North Sea investment as the Middle East crisis shows the need for domestic energy supplies.
EnQuest is diversifying operations into Asia due to a ‘challenging’ landscape in the UK, which enforces a 78 per cent profits levy.
Its annual post-tax profits fell to £1.2million after it took a £93million charge as the Government extended the tax to 2030.
EnQuest said war in Iran, which has pushed oil prices past $100 a barrel, has underlined the reliance of the world on oil and gas, and the ‘strategic importance for countries to have their own domestic oil and gas supply’.
It said Britain was an outlier in continuing to impose windfall taxes brought in after the Ukraine war broke out in 2022.
‘This has impacted confidence in the UK North Sea, with operators cutting investment, accelerating the cessation of production on assets, and consolidating activities in what they consider to be a non-core region into joint ventures,’ it said.
Industry body Offshore Energies UK says high tax rates should apply only if oil and gas prices pass a certain threshold.
Warning: Energy giant Enquest said the outbreak of war in Iran had underlined the ‘continued reliance’ of the world on oil and gas
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