North Sea oil exploration firms have told the Treasury that they face going out of business due to the 75% windfall tax imposed on them in the Chancellor’s autumn statement.
GB News economics and business editor Liam Halligan revealed that Brindex, which represents the firms, has written to Chancellor Jeremy Hunt to warn that their members face ruin.
“These aren’t the big oil majors like Shell and BP,” Liam revealed on GB News on Tuesday afternoon. [emphasis, links added]
“These are the smaller British companies that work the North Sea for oil and gas and may in fact account for about 60 or 70% of the gas and oil that is extracted from the North Sea.
“They are hugely important, they go for the smaller wells that are more difficult, and for them, their whole business is the North Sea, so this energy profits levy, which is coming to the House of Commons tomorrow for a second reading, is absolutely key.
“So they’ve written to the chancellor, and said that this latest tax rise to 75% poses an existential threat to the industry and within that jobs and our nation’s energy security.”
Jacques Tohme, a spokesman for Brindex, told GB News: “We’re talking about what is a Treasury-inflicted complete collapse of the North Sea.
“The timing of this is very important, given how strategic the North Sea is right now in the face of war with Russia and runaway inflation. This Finance bill will increase energy costs for consumers.
“It will actually lower revenues over time for the Treasury because they are on a hook for £20 billion of decommissioning and that will accelerate as fields get decommissioned earlier.
“We will have to leave the country and with that, a lot of jobs, infrastructure, and most importantly energy security and bills will suffer.
“So what we’re saying is create a very simple amendment with a price floor that will protect capital, protect jobs in energy security, and then above that level, we’re happy to pay 75%.
“The revenue will actually make more money over time because we will continue to reinvest and keep oil production up, which is what they need for their Treasury budget.”
Brindex’s members also include Serica Energy, which is responsible for 5 percent of the gas produced in the UK per year.
Read more at GB News
Very analgous in several ways to America. Whether the U.S or UK, politicians don’t seem to understand the structure or economics of the oil & gas industry. Like the North Sea, about 70% (or more) of U.S domestic oil & gas production comes from independent producers, not the majors (Exxon, Chevron, Conoco-Phillips). How many Americans are familiar with (or even heard of) names like Devon, XTO, Pioneer Resources, Apache or Continental Resources? Just like the late 70’s- early 80’s, the predictable result of any “windfall profits tax” will ONLY lead to decreased domestic investment & LOWER production. NOT a good idea in an ongoing worldwide SUPPLY shortage. A line from Forest Gump resonates…”Stupid is, as stupid does,” or something to that affect…
I know of some narrow minded person who would call this Propaganda while t hey watch the fake news from CBS Sunday Morning Fake News program