TotalEnergies’ chief executive said that the French oil major would reduce its investment in the UK if the government increased the windfall tax. Patrick Pouyanne says the plans of the Labour government to increase the tax rate and eliminate investment allowances, which allow companies to lower their tax bills, are even more problematic than the threat of higher taxes.
Pouyanne, speaking at an investor’s day in New York about capital expenditure by the Group, said: “I take this very seriously. We’ll be very careful with any capex that we spend in the UK. And [we] are looking very seriously into ways to restructure our operations.”
Pouyanne, the newest executive in the industry , warns that Labour’s plans could reduce investment in the UK North Sea. Wood Mackenzie, a consultancy, said last month that oil and gas production may halve in the UK by 2030. Critics of the government’s plans have claimed the plans could threaten energy safety.
Pouyanne stated, “I am arguing with [them], but they should copy and paste the Norwegian system that is perhaps high fiscally, but has incentives to invest.” Norway’s system offers incentives that allow companies to claim partial refunds and deduct capital expenses when they are in a loss. Labour decided to extend the temporary energy profit levy until 2030, despite oil prices having fallen since then.
If the budget for this month confirms the proposed increase, the government plans to raise the tax by 3 percentage points starting in November. This will bring the total tax rate to 78 percent.
Labour has created a state-owned firm, Great British Energy, to invest in renewable energy, including wind power. Total has invested in offshore wind farm off Scotland and is focused on the North Sea gas production.
Pouyanne confirmed that Total is still exploring the possibility of a secondary listingin New York. This move, it says, will allow them to reach US investors with greater agility even though they will remain in Paris.
He called the French proposals that would increase taxes on companies “unfortunate”. This week, the newly-elected government led by Prime Minister Michel Barnier said that big groups will have to contribute towards efforts to fix the public finances.
Pouyanne, however, said that the tax increases proposed for Total and other companies would have little effect on the group because its production is based overseas.
Total also increased its dividend by 5 percent for 2025 and continued to buy back shares at a rate of $2 billion per quarter, despite an upcoming glut in the supply of liquefied gas, which could lower prices, particularly from 2026.
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