Harbour Energy to Cut 250 Jobs from Scottish Workforce
The largest independent oil and gas firm in the North Sea, Harbour Energy, has announced that it will be cutting around 250 onshore jobs in Scotland. The company cited the UK Government’s "punitive fiscal position" and a "challenging regulatory environment" as the reasons for the job cuts.
In a statement, the managing director of Harbour Energy’s UK business said: "Harbour is launching a review of its UK operations, which we expect to result in a reduction of around 250 onshore roles in our Aberdeen-based business unit. The review is unfortunately necessary to align staffing levels with lower levels of investment, due mainly to the Government’s ongoing punitive fiscal position and a challenging regulatory environment."
The company also mentioned that it is reviewing the resourcing required to support its Viking carbon capture and storage project, which has been hindered by repeated delays to the Government’s Track 2 process. Harbour Energy recently announced losses after tax of $93m last year, down from $45m profits the year before. The company attributed this to a "108% effective tax rate".
Russell Borthwick, chief executive at Aberdeen and Grampian Chamber of Commerce, expressed his concerns about the job losses, stating: "This is a devastating blow for the 250 plus families directly affected – and I fear it is just the tip of the iceberg, unless the government changes course." SNP Westminster leader Stephen Flynn raised the job losses at Prime Minister’s Questions on Wednesday, saying: "Harbour Energy, the largest independent player in the North Sea, have announced that they’re about to shed their workforce by 25%. That’s 250 jobs in my constituency gone in the blink of his eye."
The UK Government has responded to the job losses, saying it will do "everything in its power" to support workers and communities. A spokesperson said: "Our thoughts are with any workers affected by this commercial decision. The Government has reformed the Energy Profits Levy to support investment and give industry certainty and stability. By making the UK a clean energy superpower, including launching a world-leading carbon capture and storage industry after years of delay, consenting record amounts of clean power, and ending many years of no new nuclear, we will get the UK off dependence on markets controlled by petrostates and dictators, and drive jobs and growth through our Plan for Change."
This is not the first time Harbour Energy has made significant job cuts in Scotland. In 2023, the company announced that it would be cutting around 350 onshore jobs out of its 1,200 workforce in Aberdeen due to the windfall tax. The company has been a vocal critic of the tax, officially known as the Energy Profits Levy (EPL), since its introduction in 2022.
The EPL was brought in by the then-Chancellor Rishi Sunak on the back of the war in Ukraine and with oil and gas firms at the time making record profits. Since then, oil prices have declined, sitting around $62 a barrel. The EPL has been increased and extended on several occasions since 2022, with the most recent change being an increase to 38% and an extension to 2030.
The sector says that the overall taxation on firms takes it to around 78%. The industry body, OEUK, has previously said that the windfall tax is a "disappointing blow to the industry which risks jobs, investment and economic growth". The UK Government has recently launched a consultation on ending the windfall tax and any taxation which could replace it.
As reported by STV News, Harbour Energy’s decision to cut jobs has been met with criticism from politicians and industry leaders. The company joins other oil firms, such as Apache, which announced last year that it would end its North Sea production by the end of 2029, citing the windfall tax.
The UK Government’s plans for the North Sea have been under scrutiny, with the energy secretary Ed Miliband confirming that no new oil and gas drilling licences would be granted. Miliband said: "Oil and gas production will continue to play an important role and, as the world embraces the drive to clean energy, the North Sea can power our Plan for Change and clean energy future in the decades ahead."
Source: STV News
