By Arunima Kumar
(Reuters) -Harbour Energy CEO Linda Cook warned on Thursday that waiting until 2030 for the UK government’s windfall tax to expire would do irreversible damage to Britain’s oil and gas sector, after a surge in the company’s taxes hit 2024 earnings.
Harbour, the largest British North Sea oil and gas producer, reported a loss of $93 million for 2024, compared with a net profit of $45 million in 2023, with its tax bill more than doubling to $1.31 billion from $571 million a year ago.
Pre-tax profit was $1.22 billion, missing analysts’ average estimate of $2.03 billion according to data compiled by LSEG.
Harbour’s shares slid 14% to 184 pence by 1021 GMT.
North Sea producers have argued that the UK’s Energy Profit Levy (EPL), first imposed in 2022 in the wake of a surge in energy prices following Russia’s invasion of Ukraine, has hit profits and brought uncertainty to investments.
“This is the third year now, every year since the introduction of the EPL, our effective tax rate has been higher than 100%. So clearly the EPL is not just taxing windfall profits, it’s taxing all of our profit,” Cook said on a media call.
Britain plans to overhaul the windfall tax regime on oil and gas producers once current levies run out in 2030, it said on Wednesday as it vowed to transform the North Sea into a renewables hub.
In October, the government raised the tax to 38% from 35%, taking the headline rate on the sector to 78% – among the highest in the world.
It is now asking industry players and others to provide feedback until May 28 on policy options including taxing what it calls “excess revenue”. It did not announce specific price thresholds in the consultation.
“We’re eager to engage and our message really is going to be around working with Treasury to establish a fair and stable fiscal regime and hopefully put that in place before 2030,” Cook said.
Despite the challenging environment, Harbour said it had no plans to relocate its listing from Britain to the United States.
The group’s revenue in 2024 rose to around $6.22 billion from $3.75 billion the previous year, mainly driven by higher production and post-hedging realised European natural gas prices
(Reporting by Arunima Kumar in Bengaluru; Editing by Sumana Nandy and Emelia Sithole-Matarise)
