Sunak has imposed an unexpected tax to help fund a £ 15bn package to support households as the cost-of-living crisis deepens. The industry has warned that taxes run the risk of causing a drop in investment in the North Sea at a time when Britain wants to strengthen its energy security and calls for investment to eliminate the country from foreign fossil fuels.
The additional 25% “energy tax” on profits is expected to raise an additional £ 5bn for the Treasury to help Mr. Sunak to deploy support to households. It will last for three years or until energy prices return to normal levels.
However, the chancellor also announced an 80% investment bonus, almost doubling a tax cut when companies invest. For every £ 1 invested, companies save 91 per cent. on your tax bill.
Bank of America analyst Matthew Smith said the tax details mean EnQuest is likely to pay $ 300 million (£ 237 million) between 2022 and 2024.
Jefferies analyst Mark Wilson said the move would bring the marginal tax rate on oil and gas companies to 65%, the highest level this century. However, he said the investment endowment “provides a material shield” for those making new investments in the sector.
Shares of EnQuest have fallen nearly 17% this week, while Harbor Energy, the largest producer in the North Sea, has fallen 14%.