TotalEnergies will cut its investment in British North Sea oil and gas projects by a quarter next year after the U.K. government hiked a windfall tax on the sector, the French firm's British exploration and production chief said on Nov. 30.
Energy giants Shell and Equinor have also said they were evaluating their investment plans after the windfall tax was raised to 35% from 25% this month to help plug Britain's fiscal hole.
The windfall tax, on top of several other taxes the sector is subject to, brings the overall tax rate to 75%, among the highest in the world.
"For 2023 alone, our investments will be cut by 25%," Jean Luc Guiziou said in a statement, first reported by Energy Voice.
TotalEnergies, the British North Sea's second-biggest oil and gas producer according to Woodmac data, had originally planned to spend 400 million pounds ($491 million) in the British North Sea next year, a spokesperson said.
Guiziou said in its current form without a mechanism to reflect any falls in oil and gas prices, the windfall tax will particularly affect short-term investments such as infill wells near existing production.
One project that will be axed is an infill well on the Elgin field, the spokesperson added.
"The energy industry operates in a cyclical market and is subject to volatile commodity prices. We believe that the government should remain open to reviewing the energy profits levy if prices reduce before 2028," Guiziou said.
Recommended Reading
Huddleston: Haynesville E&P Aethon Ready for LNG, AI and Even an IPO
2025-01-22 - Gordon Huddleston, president and partner of Aethon Energy, talks about well costs in the western Haynesville, prepping for LNG and AI power demand and the company’s readiness for an IPO— if the conditions are right.
E&P Highlights: Dec. 30, 2024
2024-12-30 - Here’s a roundup of the latest E&P headlines, including a substantial decline in methane emissions from the Permian Basin and progress toward a final investment decision on Energy Transfer’s Lake Charles LNG project.
FLNG Gimi Receives First Gas from BP’s FPSO in the GTA Field
2025-01-22 - Golar LNG’s Gimi FLNG vessel will support BP, which began flowing gas from wells at the Greater Tortue Ahmeyim Phase 1 LNG project in early January.
E&P Highlights: Jan. 6, 2025
2025-01-06 - Here’s a roundup of the latest E&P headlines, including company resignations and promotions and the acquisition of an oilfield service and supply company.
Winter Storm Snarls Gulf Coast LNG Traffic, Boosts NatGas Use
2025-01-22 - A winter storm along the Gulf Coast had ERCOT under strain and ports waiting out freezing temperatures before reopening.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.