Hartshead Resources NL is reviewing the economics and timeline for phase 1 development of the Anning and Somerville gas fields following plans to increase UK oil and gas taxes.
UNCERTAINTY
The Labour Party said it could raise more than £13 billion by increasing the Energy Profits Levy from 35% to 38%, leading to the headline tax rate rising from 75% to 78%, backdated to the start of 2022.
The party also proposes to end investment allowances.
Hartshead’s project assessment also follows Labour’s increase in popularity ahead of the Conservatives and the prospect of a General Election within the next nine months.
The Australian company said it had also taken into account the lower UK NBP gas price following the mild winter and record European gas storage inventories.
However it added that delays in awarding key contracts for capital items associated with the long lead items would result in a delay to first gas, previously scheduled for 2025.
Chief executive Chris Lewis described Labour’s announcement on February 8 as
disappointing for the company, its partner Viaro Energy and shareholders.
“It introduces uncertainty into our development project, which before then had been moving
forward with significant momentum.
“The danger is that these proposals will cause a flight of capital to other jurisdictions, decimate the skills and supply chain required for the UK to lead the energy transition and result in the loss of tens, if not hundreds of thousands of jobs.
“We are working with industry bodies, industry partners, contractors, unions, MPs and other
stakeholders to understand the precise plans and to highlight the danger of damaging and
self-defeating policy.”