Total Energies has revealed it will book a $1billion hit from the North Sea windfall tax.
The French firm - which is the second-largest oil and gas producer in the North Sea - has called on the UK government to “remain open” to scrapping the Energy Profits Levy, which is hitting investment.
It has already signalled that it plans to cut investment in the area by a quarter, or £100million, in response to the tax. Shell and Equinor have also said they will re-evaluate investment projects after the government increased the windfall tax in the autumn statement.
In an update yesterday, Total said it will need to pay $2.1 billion in windfall taxes across Europe after earnings rose to $6.6 billion for the third quarter of last year. Europe
Jean-Luc Guiziou, Total’s head of exploration and production in the UK, said: “The energy industry operates in a cyclical market and is subject to volatile commodity prices. We believe that the government should remain open to reviewing the energy profits levy if prices reduce before 2028.”
Guiziou has said that the windfall tax does not take account of any decline in the price of oil and gas and that it will affect short-term investments in the North Sea.
Total has indicated it could abandon its investment in the Elgin gas field off the Scottish coast.
Shell disclosed a $2.4billion hit from UK and EU levies earlier in January, while BP, the third-largest oil and gas producer in the North Sea, has said it expects to pay about $2.5billion in UK taxes in 2022, including about $800million under the new levy.
Harbour Energy, which is the UK’s biggest producer, expects to pay $900million in UK taxes this year, including $400million under the levy, according to the Financial Times.