Enquest slumps into the red as windfall tax continues to hammer North Sea firms
Enquest slumped into the red as the windfall tax continues to hammer North Sea operators.
The energy group posted losses of £16.8million for the six months to June having made a profit of £162.1million over the same period last year.
Like many of its rivals, the oil and gas producer has been battered by the windfall tax, which was introduced last year by Rishi Sunak when he was Chancellor after global energy prices spiked.
Squeezed: Enquest posted losses of £16.8m for the six months to June having made a profit of £162.1m over the same period last year
The Energy Profits Levy imposed a 25 per cent tax surcharge on profits, and was raised to 35 per cent by Jeremy Hunt after he took over at the Treasury.
On top of the hefty charges already faced by North Sea operators, the levy imposes an effective 75 per cent corporate tax rate on the industry and is set to remain in place until 2028, even as energy bills ease.
Enquest said it paid £61million in tax in the six months to June due to the levy – sending its Aim-listed shares down 12.1 per cent yesterday.
Chief executive Amjad Bseisu said: ‘The UK’s oil and gas sector faces significant challenges and loss of competitiveness due to uncertainty following the adverse changes to the fiscal regime.
‘We believe timely legislative reform is required to restore confidence in the UK oil and gas sector to protect jobs and deliver both energy security and decarbonisation.’
Other North Sea operators have also criticised the tax.
Last month, Ithaca Energy bosses said it has already led to the ‘deferral and cancellation of certain 2023 and 2024 projects’.
Earlier this year, Harbour Energy said its annual profits were ‘all but wiped out’ by the tax.
Francesca Bell, analyst at lobby group Offshore Energies UK, said Enquest’s latest results were ‘another worrying example of the negative impacts the tax is having on UK energy production’.
Oil back above $90
Oil rose back above $90 a barrel as Saudi Arabia and Russia said they would extend production cuts to the end of the year.
The rise took Brent crude to its highest level since November last year and up by more than 25 per cent since the summer lows close to $70.
The surge in oil prices spells yet more misery for motorists who have seen the price of fuel rebound in recent weeks.
The price of petrol on UK forecourts is at its highest level so far this year.
The average pump price of a litre of unleaded petrol hit 151.7p this week, up from 150.7p the previous week.