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London: French firm ‘Total Energy’ said it would cut its North Sea oil and gas investments by around 25% next year after the UK extended the windfall profit tax to energy companies.
“Following another change in the tax environment for UK energy investors, we are now assessing the impact of this change on our current and planned projects,” said Jean-Luc Giziot, Head of UK Manufacturing Operations .
“For the year 2023 alone, our investments will be reduced by 25 percent,” quoted the specialized newspaper “Energy Voice”.
In turn, “Total Energy” on Friday confirmed these statements to Agence France-Presse.
The company will cut its North Sea investments by 100 million pounds ($123 million) in 2023 after Finance Minister Jeremy Hunt unexpectedly raised the tax on the oil and gas giants whose profits soared as a result. of the fallout from the war in Ukraine.
The move, approved in last month’s budget, was intended to help fund subsidies for British consumers who have been hit by soaring energy bills.
The government wants the energy sector to foot part of the bill as it tries to shore up the country’s public finances, which have been hit by a combination of political unrest in the UK, support to fight pandemics and the fallout from Brexit.
However, Ghizieu said this week that “a competitive and stable financial and regulatory system is vital to investing in critical energy and infrastructure projects that will support the UK’s security of supply and environmental and climate ambitions.”
Hunt announced that energy giants, also including Shell and BP, will face a whopping 35% profit tax, up from 25%, for another three years through 2028.
“The (UK) government should remain open to reviewing the energy dividend tax if prices fall before 2028,” Gizio said.
