The chief executive of Enquest, a major North Sea oil and gas producer, has issued a stark warning about the detrimental effects of the windfall tax on offshore oil and gas operations. Amjad Bseisu claims that the Energy (Oil and Gas) Profits Levy is inflicting “irreversible damage” to the sector and jeopardising billions of pounds in potential investments. Bseisu emphasised that Enquest has already invested more than £4 billion in Britain and would be prepared to commit similar sums in the future if the policy environment were to improve.
He expressed concerns about the industry’s ability to retain crucial engineering skills and jobs, which are vital for the transition to lower-carbon industries. The energy profits levy, introduced in 2022 and subsequently expanded, has faced criticism from industry leaders. Chancellor Rachel Reeves has announced plans to increase the headline rate from 75 per cent to 78 per cent and extend the timeframe of the charge until March 2030.
Oil and gas producers are hopeful for potential incentives in the upcoming budget. Enquest’s financial results for the first half of the year reflect the challenging environment. Revenue decreased from $770 million to $586 million, primarily due to weaker gas prices and reduced output. The company’s production averaged 42,771 barrels of oil equivalent per day, with a full-year forecast between 41,000 and 45,000 barrels daily. Notably, Enquest incurred a $34.1 million tax charge for the energy profits levy during this period.
Bseisu confirmed that Enquest is considering allocating more capital to its Malaysian operations while potentially reducing spending in Britain. The company remains open to consolidation opportunities in British waters but acknowledges that the current tax system has shortened the list of viable investment prospects. The Enquest CEO called for a more progressive tax regime that recognises the maturity of the North Sea and re-establishes the UK as a globally competitive investment basin. He stressed the need for government policies that incentivise rather than discourage investment in the sector. As the debate over the windfall tax continues, the future of the UK’s energy sector hangs in the balance. Industry leaders argue that a more balanced approach is necessary to ensure the long-term viability of North Sea operations and support the transition to cleaner energy sources.
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