UK offshore sector warns of risks of further tax hikes
By Jeremy Beckman * Editor-Europe
More than 40 organizations in the UK have issued an open letter warning of the risks posed by the new Labour government’s proposed tax increases on offshore oil and gas production.
The letter says that the forthcoming 3% increase to the Energy Profits Levy (EPL)—which will lift the headline tax rate for the sector to 78%; the extension to 2030; the removal of the current investment allowance and a reduction in capital allowances—collectively put at risk thousands of UK jobs, along with the companies that can support the government’s net zero targets.
Signatories include executives from manufacturing, engineering and technology companies with offices and workshops across the UK, employing tens of thousands of staff involved in oil and gas, wind, hydrogen and carbon capture projects.
In the letter, prepared by industry association Offshore Energies UK (OEUK), the signatories call on the government to invite the sector to join the Industrial Strategy Council and Supply Chain Task Force.
This, they say, can help realize the full benefits of the planned energy transition, supported by jobs, skills and companies anchored in the UK. The letter also highlights the impact of the EPL on Britain’s supply chain.
OEUK has identified £200 billion ($262 billion) in private domestic ready to support the wider energy transition through domestic offshore wind, carbon capture and storage, and hydrogen that could be unlocked by more globally competitive policies for the sector.
The joint letter, sent to Sarah Jones, Minister of State for Industry and Decarbonisation, stated that for OEUK’s members, the surprise EPL hike “risks operators—big and small—further scaling back or postponing their investment plans in response. The ramifications will be felt throughout the supply chain, through jobs, and the communities this industry supports, both directly and indirectly.”
David Whitehouse, the association’s CEO, said, “Supply chain companies are the backbone of the UK’s offshore energy industry and have powered the country for last 50 years. To harness the full potential of these world class UK companies for the next 50 years, there is no simple choice between oil and gas or renewables. The reality is that we will need both to support these companies, power the country and grow the economy...
“The government has committed to working in partnership with industry; it is vital this sector is represented in the groups determining industrial policy and that the government appreciates the impact that their proposed tax changes will have on the supply chain, which is responsible for most of the 200,000 jobs supported by this sector.”
The Aug. 21 open letter signed on behalf of members of the OEUK Supply Chain included:
- David Whitehouse, Chief Executive Officer, Offshore Energies UK
- Kevin Franklin, Chief Executive Officer, 3t
- Alexis Fletcher, Chief Executive Officer, Ancala Midstream
- Ryan Menzies, Board Director, Apollo Engineering Consultants
- Mike Pettigrew, Group Chief Executive Officer, ASCO UK
- Sandy Bonner, UK President, Bilfinger UK
- Howard Johnson, Managing Director, Blaze Manufacturing Solutions
- Tom Murdoch, Managing Director, Brimmond
- Matt Rhodes, Director UK Energy Services, Bristow Helicopters
- Adam Byrne, Operations Director, CAN Group
- Colin Black, Managing Director, Carjon-NRG
- Iain Edgar, Director, Clarity Energy
- Sam Hanton, Executive Vice President, Claxton Engineering
- Robert Allan, Managing Director, Core Energies
- Martin Smith, Managing Director, Cyber Prism
- Jon Oliver Bryce, Chief Strategy Officer, Dolphin Drilling
- Lenny Collins, Group Managing Director, Dron & Dickson Group
- Raghbir Chand, Managing Director, ESR Technology
- Nassima Brown, Director, Fennex
- Neil Meldrum, Managing Director, FourPhase
- Bob Drummond, Executive Chairman, Hydrasun
- Steven Harris, Managing Director, Integrity HSE
- Stuart MacBride, Chief Executive Officer, International Medical Management
- Peter Skinner, UK Country Manager, KCA Deutag Drilling
- Kevin Watt, Managing Director, Kinetics Controls & Innovation
- Matthew Lewin, Technical Director, Marine Technical Limits
- Gregor Scott, Managing Director, Ocean Installer
- Ivan Gutierrez, Chief Executive Officer, OGC Energy
- Chris Coull, Managing Director (Scotland), Peterson
- Ryan Stewart, Chief Commercial Officer, Prosafe Offshore
- Davis Larssen, Chief Executive Officer, Proserv
- Botan Osman, Chief Executive Officer, Restrata
- Louise Martin, Director, Rigrun
- Scott McKenzie, Partner, RLG International
- Nick Dunn, Chief Executive Officer, Score Group
- Ed Morrow, Managing Director, Sodexo
- Hani El Kurd, Senior Vice President UK, Subsea7
- Phil Brading, Chief Operating Officer, Sword IT Solutions
- MJ Karbasian, Chief Executive Officer, Veunex Global
- Doug Birnie, UK Director, Weatherford UK
- Phil Milton, Chief Executive Officer, Well-Safe Solutions
- Martin Simmonite, Senior Vice President UK Operations, Wood
- Stephen Swindell, Chief Executive Officer, Xodus Group
