North Sea oil exploration firms have told the Treasury that they face going out of business due to the 75% windfall tax imposed on them in the Chancellor’s autumn statement.
GB News economics and business editor Liam Halligan revealed that BRINDEX, which represents the firms, has written to Chancellor Jeremy Hunt to warn that their members face ruin.
“These aren't the big oil majors like Shell and BP,” Liam revealed on GB News on Tuesday afternoon.
North Sea oil exploration firms have told the Treasury that they face going out of business due to the 75% windfall tax imposed on them in the Chancellor’s autumn statement. Andrew Milligan
“These are the smaller British companies that work the North Sea for oil and gas and may in fact account for about 60 or 70% of the gas and oil that is extracted from the North Sea.
“They are hugely important, they go for the smaller wells that are more difficult, and for them their whole business is the North Sea, so this energy profits levy, which is coming to the House of Commons tomorrow for a second reading, is absolutely key.
“So they've written to the chancellor, and said that this latest tax rise to 75% poses an existential threat to the industry, and within that jobs and our nation's energy security.”
Jacques Tohme, a spokesman for Brindex, told GB News: “We're talking about what is a Treasury-inflicted complete collapse of the North Sea. GB News
Jacques Tohme, a spokesman for Brindex, told GB News: “We're talking about what is a Treasury-inflicted complete collapse of the North Sea.
“The timing of this is very important, given how strategic the North Sea is right now in the face of war with Russia and runaway inflation. This Finance bill will increase energy costs to consumers.
“It will actually lower revenues over time for the Treasury because they are on a hook for £20 billion of decommissioning and that will accelerate as fields get decommissioned earlier.
“We will have to leave the country and with that a lot of jobs, infrastructure, and most importantly energy security and bills will suffer.
“So what we're saying is create a very simple amendment with a price floor that will protect capital, protect jobs in energy security, and then above that level we're happy to pay 75%.
“The revenue will actually make more money over time, because we will continue to reinvest and keep oil production up which is what they need for their Treasury budget.”
Brindex’s members also include Serica Energy, which is responsible for 5 per cent of the gas produced in the UK per year.