A US oil firm has blamed the impact of the windfall taxas it confirmed it will end all its operations in the North Sea by the end of the decade.
Apache, who took control of the field in Scotland in 2003, said the recent Labour Budget had made production “uneconomic.”
The firm, based in Texas, suspended new all drilling activity last year in the Forties field, east of Fraserburgh.
It comes after Chancellor Rachel Reeves confirmed in the Budget that the tax on oil and gas firm profits would rise and be extended to 2030.
Apache has confirmed they will cease operations by 2030
Apache/PA
It comes as Labour said it wanted to make the UK a “clean energy superpower” and it was asking the oil and gas sector to contribute more to that transition.
The Energy Profits Levy (EPL) the official name for the windfall tax, was introduced in May 2022 under the previous Conservative Party after energy firms recorded bumper profits due to the rise in energy prices.
Initially set at 25 per cent and due to expire in 2025, the Conservatives later raised it to 35 per cent and said it would last until March 2029.
In the recent Budget, Labour extended it to the end of the decade and raised the levy to 38 per cent meaning the total tax rate on the companies is now 78 per cent.
LATEST DEVELOPMENTS:
Apache
An Apache spokesman said: “The onerous financial impact of the EPL, combined with the substantial investment that will be necessary to comply with regulatory requirements, makes production of hydrocarbons beyond 2029 uneconomic.
“Looking forward, our focus will be on maintaining asset safety and integrity as we prepare for the responsible decommissioning of our assets.”
A Government spokesman told BBC: “We are committed to making the UK a clean energy superpower, with both public and private investment required to support the transition, enhance energy security, and provide sustainable jobs of the future.
“To that end we secured £24billion for green industries at the International Investment Summit and have made changes to the Energy Profits Levy that recognise the oil and gas sector’s role in the UK’s energy mix while asking it to contribute more to the transition, helping to fund GB Energy based in Aberdeen.”
It comes as the Chancellor has unveiled plans for 11 new green hydrogen projects across England in addition to GB Energy and the Government’s investment into carbon capture and storage.
Rachel Reeves told the Commons: “Earlier this month, we announced a significant multi-year investment between Government and business into carbon capture and storage, creating 4,000 jobs across Merseyside and Teesside.
“Today, I am providing funding for 11 new green hydrogen projects across England, Scotland and Wales – among the first commercial-scale projects anywhere in the world – including in Bridgend, East Renfrewshire and in Barrow-in-Furness.
“We are kick-starting the Warm Homes Plan by confirming an initial £3.4billion over the next three years to transform 350,000 homes, including a quarter-of-a-million low-income and social homes. And we will establish GBEnergy, providing funding next year to set up Great British Energy at its new home in Aberdeen.”
