Harbour Energy PLC (LSE:HBR) said it has decided not to bid on new oil and gas wells as a result of the UK Government's windfall tax.
Britain’s largest North Sea oil producer also said it is reviewing its investment in response to the Energy Profits Levy, which Chancellor Jeremy Hunt increased to 35% from 25%, taking the marginal tax rate on North Sea profits to 75%.
“As a result of the extension of the energy profits levy announced in the Government’s Autumn Statement, we are reviewing investment levels and company-wide capital allocation. This review is ongoing and, in the meantime, we have decided not to submit bids as part of this licensing process," Harbour Energy said in a statement.
“We have good opportunities within our existing North Sea and International portfolios, and these will be our focus at this time," it added.
The windfall tax is being used to help subsidise household energy bills as oil and gas prices spiral higher, handing record profits to fossil fuel producers at a time when consumers have been struggling to heat their homes.
However, the industry has warned the tax may limit investment.
French oil giant TotalEnergies has already announced plans to cut spending in the North Sea by £100mln next year due to the tax.
FTSE 100-listed Shell PLC (LSE:SHEL, NYSE:SHEL) has also said it is reviewing plans to invest £25bn in Britain’s energy system due to the tax.