Oil and gas bosses from across the North Sea have decried Labour as “clueless” following its proposed windfall tax hike.
Comments have emerged on social media in the wake of Labour’s “Green Prosperity Plan”, which would see the levy hiked and extended, while removing all investment allowances for the sector.
Trade body Offshore Energies UK (OEUK) warned 42,000 jobs could be lost, while analysts said it “may herald the end” of North Sea oil and gas investment.
Petrofac’s chief commercial officer, Marc Bonandrini wrote on social media: “No doubt this makes for concerning reading, and a bit of leap that some assume funding, historically directed to O&G [oil and gas] projects, will automatically be used to invest in green energies…in/off the UK.”
On the same social media post finance director at Subsea 7, Colin Strachan, described Keir Starmer’s policy as “clueless!”
The move would increase the headline rate to 78% – the same as Norway – but would scrap investment incentives, which differs from the Scandinavian state which offers allowances.
The move goes well beyond the Energy Profits Levy (EPL) measures first introduced by the Conservatives in 2022, which has already seen job losses and cuts to spending.
Aberdeen and Grampian Chamber of Commerce (AGCC) describing the move as a “betrayal”, three months on from Keir Starmer’s visit to the city.
Energy Voice readers described the move as a “sound bite rather than fiscal common sense” while others argued the policy would be “taxing people out of jobs.”
Norway’s manufacturing prowess
Energy Voice columnist, Dick Winchester gave his two cents: “The big difference between Norway and Scotland in particular is that Norway has a growing and broad-based renewables technology manufacturing sector.
“Hydrogen electrolysers, fuel cells, FC marine drive trains and they’re currently prototyping a new design of floating wind turbine plus they’re able to turn captured carbon into carbon fibre.
“In short they’re well on their way to a so-called just transition. We’ve not really started.”
Late last year Scotland’s Just Transition Commission said that “significant” further action is needed to support the workforce.
In its second annual report, the Just Transition Commission said that the country’s ability to deliver a just transition hinges on a “genuine whole-of-government approach to delivery.”
Questioning who to vote for
Looking ahead to the impending general election, some readers are finding it difficult to back either of the major political parties in the UK.
Kieran Hope, chief operating officer of Air Control Entech, said: “I genuinely don’t know who you could vote for in the next election. The UK Energy Sector is going to be hit hard, it’s just a case of how hard.”
Garry Duff, managing director at OUI Scotland, shared the sentiment, stating: “It’s time to get rid of them all! No party is better than the other!”
Labour was asked to respond to these criticisms.
Mr Hope explained that North Sea operators have made it “quite clear” that the supply chain is “already preparing heavily to look elsewhere to support business growth”, he argued: “Biting off the arm that feeds you is not, nor will it ever be, a good strategy.”
Some expressed frustration with Labour by commenting that the party has “not got a clue”, while words like “clowns” and “numpties” were also used.
Others described it as a “kick in the teeth to the offshore sector in Scotland”.
One retired worker Labour hadn’t “given any thought” to its latest policy on North Sea taxation, adding: “Revenue will drop dramatically when decommissioning is brought forwards.”
Transferring value back to the state?
However, there were those who backed the hike in tax for oil and gas firms.
Paul Brindley, a senior consultant for asset management and decommissioning, shared his views “Actually, the value will be transferred from the oil companies back to the state.
“No value will be lost unless the oil price collapses or the reserves get left in the ground. This is merely a transfer of wealth back to the people who actually own the oil/gas reserves – us the little people!”
Ron Penman, a retired platform material coordinator, described the proposed tax hike as a “more realistic” policy as he showed his support.
However, over the weekend analysis at Welligence said that Labour’s policy “may very well herald the end of oil and gas investment in the North Sea”.
Energy Voice recently spoke about the proposed policy in the latest episode of the Energy Voice Out Loud podcast, which can be found here.