Harbour Energy to Cut 250 Jobs Following Government Tax Increases

Harbour Energy, the largest oil and gas producer in the North Sea, has announced plans to cut 250 onshore jobs, representing up to a quarter of its North Sea workforce. The roles, mainly based in Aberdeen, are being reduced as the company grapples with what it describes as a “punitive fiscal regime” imposed by the UK government.

The company criticised the energy profit levy, a tax introduced in 2022 by Boris Johnson’s Conservative government and increased by Labour’s Rachel Reeves in 2023. The levy currently taxes UK profits at a marginal rate of 78 per cent and has been extended until 2030. Harbour Energy reported a $1.3 billion tax bill for 2024, which contributed to the company recording an after-tax loss of $93 million despite a pre-tax profit of $1.2 billion on revenues of $6.2 billion.

Scott Barr, managing director of Harbour Energy’s UK business, stated that the decision to reduce the workforce was unavoidable. He cited lower levels of investment in the North Sea, partly driven by the challenging fiscal and regulatory environment, as the main reason behind the announcement. Barr also pointed to delays in the government’s carbon capture and storage initiatives as factors further obstructing growth. Harbour Energy is involved in major projects such as the Viking carbon capture project and the Acorn development in northeast Scotland, but progress has been slow under the government’s Track 2 process.

Aberdeen & Grampian Chamber of Commerce has described the job losses as a severe setback for the region. Chief executive Russell Borthwick called for the government to reconsider its energy taxation strategy and emphasised the risk of further cuts to jobs in the North Sea oil and gas sector. The chamber highlighted the sharp contrast between the high taxes facing UK producers and the lack of comparable levies on imported energy with higher emissions.

Despite the challenges, Harbour Energy has sought to diversify its portfolio away from the UK. Last year, the company completed an $11.2 billion deal to acquire assets in South America, Africa, Mexico, and Norway. It remains one of the largest producers in the UK sector, with daily production of 149,000 barrels of oil equivalent in 2024 and expectations to produce up to 475,000 barrels a day globally in 2025.

The government has defended its tax policy, arguing that it has been reformed to support investment while maintaining stability in the industry. A government spokesperson expressed support for workers affected by the announced cuts and pledged to assist impacted communities through this transition.