North Sea oil giant to cut 250 jobs in response to ‘punitive fiscal regime’

The largest oil and gas field operator in the North Sea is cutting 250 jobs because of what it calls the ‘punitive’ fiscal regime in oil and gas.

Up to a quarter of Harbour Energy’s North Sea workforce, largely based in Aberdeen, could be at risk of redundancy – a development that has been called a devastating blow for the area by the Aberdeen & Grampian Chamber of Commerce.

Scott Barr, the managing director of Harbour’s UK business, said: “Harbour is launching a review of its UK operations, which we expect to result in a reduction of around 250 onshore roles in our Aberdeen-based business unit.

“The review is unfortunately necessary to align staffing levels with lower levels of investment, due mainly to the government’s ongoing punitive fiscal position and a challenging regulatory environment.”

The introduction of the energy profit levy in 2022 under the then Conservative government played a part in the loss of 350 onshore roles at the firm. Since then, the levy paid on profit has risen further, with UK profit now taxed at a marginal rate of 78%.

Harbour is also working on the Viking carbon capture project on the Humber and is a partner in the Acorn carbon capture scheme in the north east of Scotland – schemes also affected by cost and switches in policy.

Barr added the company was also reviewing the resourcing required to support its Viking carbon capture and storage project, where progress had been hindered by “repeated delays” in government planning.

He said: “Harbour remains among the largest producers in the UK North Sea and, while our dedicated and highly skilled people will continue to produce vital energy safely and responsibly, we must take these difficult steps in response to the challenges presented by the current external environment.”

Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce, called for an end to the windfall levy and raised concerns about further jobs losses.

He said: “I fear it is just the tip of the iceberg, unless the government changes course. Labour’s long-term ambitions are laudable, but in the absence of a proper industrial strategy, we are left with policies which are destroying a world-class British industry.

“The UK currently has a crippling 78% tax on North Sea oil and gas, all while importing record levels of foreign energy — with higher emissions – tax free.

“The result is 10,000 North Sea jobs lost since the windfall tax was introduced in 2022. And failure to back carbon capture storage projects, like Acorn, is also now putting people out of work.”

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