Harbour Energy slams UK windfall tax as profits 'all but wiped out'

North Sea oil producer Harbour Energy said windfall taxes had “all but wiped out” its full-year profits and forced it to cut jobs and investment.

The company on Thursday said pre-tax profits had risen almost 700% to $2.5bn in 2022 from $315m a year earlier in response to a surge in oil and gas prices caused by the Ukraine war.

However, its after-tax profits fell in just $8m from $315m. The company was hit with a tax bill of $2.4bn - including $1.5bn from the so-called UK energy profits levy.

It came as revenues from gas nearly doubled to $2.3bn (£1.9bn) while crude oil income was up 27pc to $2.8bn (£2.4bn). The company also unveiled a $200m share buyback.

“The UK Energy Profits Levy, which applies irrespective of actual or realised commodity prices, has disproportionately impacted the UK-focused independent oil and gas companies that are critical for domestic energy security,” said chief executive Linda Z Cook.

"For Harbour, the UK's largest oil and gas producer, it has all but wiped out our profit for the year. This has driven us to reduce our UK investment and staffing levels.”

"Given the fiscal instability and outlook for investment in the country, it has also reinforced our strategic goal to grow and diversify internationally."

The company reiterated its expectations for production of between 185,000 and 200,000 barrels of oil equivalent per day this year and $1.1bn of capital expenditure.

Reporting by Frank Prenesti for Sharecast.com