North Sea oil shares drop as industry warns against fresh tax raid
NORTH SEA oil and gas producers have told the Chancellor that a new tax raid would trigger an investment flight, as Jeremy Hunt prepares to raise the windfall tax on the industry.
Shares in Uk-listed North Sea oil and gas producers fell sharply following reports that the windfall tax on the sector is set to be extended from 25pc to 35pc in the Autumn Statement on Thursday. It would take the overall tax rate to 75pc.
Harbour Energy, the North Sea’s largest producer, was down 8.28pc while Serica Energy, which produces about 5pc of the gas produced in the North Sea, was down 8.61pc.
The industry warned that any further raid on profits would put companies off making the investment in the basin needed for the UK’S security of supply.
Serica Energy said increasing the tax burden would “push it to consider investment opportunities outside of the UK”. Trade group Offshore Energies UK said investors risked being “driven out” by tax increases.
Robin Allan, chairman of Brindex, which represents 20 producers including Enquest and Harbour, said: “The risks to investing in the North Sea increase with every change to the fiscal regime.”
A Treasury spokesman said: “We do not comment on speculation around tax changes outside of fiscal events.”
It came as shares in London-listed Alaskan oil explorer Pantheon Resources fell 12.18pc after it emerged one of the America’s best-known shortsellers was targeting its stock.
More than £80m was wiped off its market value after Muddy Waters Research’s 0.69pc stake came to light. Muddy Waters has not commented on its investment, but it typically bets on share price falls, usually publishing research online detailing what it sees as the shortcomings of a business.
Led by chief executive John Cheatham, Pantheon is developing oil projects in Alaska, which it says have “multibillion barrels of oil potential”.
Muddy Waters’ prominent short-selling campaigns include Abu-dhabi healthcare group NMC Health, which collapsed in 2020 after accounting irregularities were uncovered.