Harbour Energy to Cut 350 UK Onshore Jobs, Cites Windfall Tax as Reason

Harbour Energy, the UK’s largest oil and gas producer, has announced that it expects to cut 350 onshore jobs in the country. The company cited the UK government’s windfall tax as the reason behind the decision. Harbour Energy has been reviewing its operations since January after warning that it was re-evaluating its future activity in the UK. The majority of its onshore workforce is based in Aberdeen, Scotland. The company is working hard to reduce the impact of the workforce reduction, and it is opening a voluntary redundancy scheme and implementing a recruitment freeze. The reduction figures do not include UK-based corporate and international roles, which are still being reviewed, nor do they include the offshore organisation, where the impact is expected to be lower.

The windfall tax, officially known as the Energy Profits Levy, was introduced by Prime Minister Rishi Sunak when he was Chancellor, and it applies to profits made from extracting oil and gas in the UK. The tax rate is set at 25%, but it was announced in the autumn by current Chancellor Jeremy Hunt that it would increase to 35% from January 2023 and run until March 2028. The tax is not applied to other activities such as refining oil and selling petrol and diesel on forecourts. The company stated that due to the energy profits levy, which results in an effective tax rate of 75% in the UK, it has had to reassess its future activity level in the country, regardless of the level of oil and gas prices in the market or realised.

Harbour Energy’s statement expressed the company’s concern for the impact of the news on its employees, and it promised to carry out the review fairly and with consideration for everyone who is affected. The company’s offshore organisation is expected to be less affected than the onshore operations. The job cuts are a blow to Aberdeen, which has been hard hit by the decline in the North Sea oil industry in recent years. The city has been working to diversify its economy and reduce its reliance on the oil and gas industry. Harbour Energy’s decision highlights the challenges faced by the industry and the need for the government to support efforts to create a more sustainable future for the region.

In conclusion, Harbour Energy’s announcement of job cuts in the UK is a clear indication of the impact of the energy profits levy and the need for the government to support efforts to create a more sustainable future for the region. The reduction in onshore jobs is a blow to Aberdeen, which has been working to diversify its economy and reduce its reliance on the oil and gas industry. The company’s commitment to carrying out the review fairly and with consideration for everyone who is affected is commendable, but the situation underscores the challenges faced by the industry and the need for a concerted effort to transition to a more sustainable future.