Offshore staff
NORTH PERTH, Australia — Hartshead Resources is reviewing the economics and timeframe for Phase 1 of its proposed development of the Anning and Somerville gas fields in the UK southern North Sea.
This follows changes in the UK’s fiscal regime proposed by the opposition Labour Party, currently projected to win Britain’s next general election later this year.
Somerville and Anning contain combined audited 2P reserves of 301.5 Bcf. Hartshead and its partners had expected to take FID on the development later this year, targeting first gas in 2025 via two normally unmanned platforms exporting gas to the UK mainland via nearby offshore infractructure.
Labour has proposed increasing the present Conservative Government’s Energy Profits Levy (EPL) from 35% to 38%, which would increase the headline tax rate on UK oil and gas production from 75% to 78%.
The party also plans to remove the present investment allowance on the EPL and reduce the tax relief on capital investments from 91.4% to about 46%. First-year capital expensing would not change.
Hartshead is assessing the potential impact while also noting the steep decline in UK gas prices following a mild winter with projections of near-record European gas storage inventories at the end of the winter season.
CEO Chris Lewis said Labour’s announcement last month “introduces uncertainty into our development project, which before then had been moving forward with significant momentum. The danger is that these proposals will cause a flight of capital to other jurisdictions, decimate the skills and supply chain required for the UK to lead the energy transition and result in the loss of tens, if not hundreds of thousands of jobs.
“We are working with industry bodies, industry partners, contractors, unions, MPs and other stakeholders to understand the precise plans and to highlight the danger of damaging and self-defeating policy,” he said.
03.11.2024
