The UK faces “potential energy shocks in the future” as a result of Chancellor Jeremy Hunt’s extension of the windfall tax, a North Sea boss has warned.
Serica Chief Executive Mitch Flegg used the firm’s year-end update to the London Stock Exchange to “express considerable disappointment” with Hunt’s decision to extend the Energy Profit Levy (EPL) for another year with the aim of raising an extra £1.5billion from North Sea energy companies.
He added the increased tax burden will be “damaging for UK jobs and the economy” and argued that “current oil and gas prices do not represent windfall conditions for UK producers”.
In its update, the firm highlighted that it had increased the amount of oil and gas it has in reserves after it acquired stakes in the Greater Buchan Area from Jersey Oil and Gas.
Mr Flegg said that most of the new reserves were already producing oil and gas which “limits incremental emissions” and “have added to domestic sources of energy”.
He said: “It would be remiss not to express considerable disappointment with the extension of the EPL announced in the Budget yesterday.
“Current oil and gas prices do not represent windfall conditions for UK producers and increasing the tax burden on domestic oil and gas production again will be damaging for UK jobs and the economy.
“The achievements delivered by Serica have added to domestic sources of energy.
“The kind of approach exhibited in the Budget will lead to more imports and reduce the ability of our industry to enhance the UK's resilience to potential energy shocks in the future."