UK companies servicing oil and gas operators have urged Prime Minister Boris Johnson and Chancellor Rishi Sunak against a windfall tax, industry body Offshore Energies UK (OEUK) has revealed.
Thirty-one organizations in the UK’s offshore energy supply chain have written an open letter calling for an end to speculation on the tax, OEUK outlined, labeling the move as “unprecedented”. In the letter, which OEUK issued on the behalf of the companies, the businesses warn that the industry is only in
the early days of a recovery after companies suffered significant losses in recent downturns, OEUK highlighted.
“A one-off windfall tax on energy producers will not sustainably help consumers and will only further reduce investor confidence in the UK, the ripple effect of which we will feel for many years to come,” the letter stated.
“And it will do nothing to address the cyclical nature of an energy system linked to global supply and demand, with the UK becoming much less attractive to investors who will look elsewhere for the long-term stability they require to progress major energy projects,” the letter continued.
OEUK Chief Executive Deirdre Michie said, “after significant downturns which saw the offshore energy industry lose thousands of jobs, we need to encourage investment in cleaner energies and the sector which supports it”.
“This industry is committed to supporting the country’s energy security, economy and net zero ambitions – now is the time for us to work together to drive action,” Michie added.
Earlier this month, OEUK revealed that it had written to UK energy secretary Kwasi Kwarteng, setting out the sector’s latest responses to the cost of living crisis and its concerns over the consequences of a windfall tax. Back in March, OEUK noted that threats of a windfall tax on the UK’s offshore oil and gas operators could cause “irreparable damage” to the industry and put consumers at risk of future supply crises.
The UK’s opposition Labour party has been pushing for a “windfall tax” on energy profits for some time, although the ruling Conservatives voted against the idea last week.
Rigzone emailed the UK Department of Business, Energy and Industrial Strategy (BEIS) and the HM Treasury (HMT) asking if the UK government could impose a windfall tax on oil and gas companies in the future. BEIS responded by telling Rigzone to contact HMT. A HMT spokesperson responded by pointing Rigzone to the below statement by Sunak, which was made in the House of Commons on May 17:
“We … do not believe that windfall taxes are the simple and easy answer to every problem. However, we are pragmatic, and we want to see our energy companies, which have made extraordinary profits at a time of acutely elevated prices, investing those profits back into British jobs, growth and energy security. I have made it clear and said repeatedly that, if that does not happen soon and at significant scale, no option is off the table.”
The full list of letter signatories can be seen below:
Kevin Franklin, Chief Executive Officer, 3T Energy Group
Sian Lloyd Rees, UK Managing Director, Aker Offshore Wind
Ryan Menzies, Group Managing Director, Apollo
Katy Gifford, Chief Executive Officer, Aubin Group
Romain Chambault, Vice President Global Services & Offshore, Baker Hughes
Sandy Bonner, Executive President, Region UK, Bilfinger
Charlie Leslie, Director, Blade Energy Partners
Colin Black, Managing Director, Carjon-NRG
Colin Rowley, Managing Director, Dron Dickson
Ian Mills, Managing Director, Exceed
Nassima Brown, Director, Fennex
Katherine Milne, Customer Relations Manager, Global E&C
Steve Nowe, Senior Area Manager, Europe, Halliburton
Bob Drummond, Chief Executive Officer, Hydrasun
Sandy Reid, Managing Director, ODE Asset Management
Neill Crone, General Manager, Offshore Water Management
Chris West, Chief Executive Officer, Optimus Plus
Simon Rio, Chief Executive Officer, PD&MS Group
John Pearson, Chief Operating Officer, Petrofac
Olivier Renaud, Managing Director, Ponticelli
Louise Wood, Managing Director, Prodrill Energy Resource Solutions
Brian Mercer, Managing Director, Semco Maritime
Steve Hunt, Regional Director UK, Stork
Steve Wisely, Senior Vice President, Subsea7
Sarah Cridland, Vice President Commercial & Subsea Projects UK, Med & Caspian – UK Country Manager, TechnipFMC
Tina Booth, Office Manager, Tees Medical Services
Rebecca Rainbow, Group HSEQ Manager, Texo Group
Walter Thain, Chief Executive Officer, Three60 Energy Group
David Clark, Chief Executive Officer, Vysus Group
Craig Shanaghey, President – Operations, EMEA, Wood
Daniel McAteer, Vice President – Energy, Worley
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