Yahoo Finance Watch: North Sea platform blown up as Britain’s oil industry declines
A 48-year-old former North Sea oil platform has been demolished as a looming Labour tax raid on the sector drives a slump in fossil fuel activity in British waters.
The Northern Producer platform was demolished with multiple blasts of high explosive last week because of a lack of interest.
It was brought ashore to Kishorn Port in Scotland for a refit pending redeployment last year.
However, a tax raid on the oil and gas industry has rendered the platform redundant.
Businesses have been cutting investment or quitting the North Sea because of the Government’s windfall tax and Labour’s threats to increase it.
The Government introduced a windfall tax on oil and gas profits two years ago, which has raised the marginal tax rate to 75pc.
Labour wants to increase it further to 78pc and has said it would ban new oil and gas exploration in British waters. The demolition of Northern Producer coincided with the publication of Labour’s manifesto.
The proposals have prompted several companies to walk away from projects in the North Sea.
Deltic Energy, run by a Labour campaigner, recently blamed “negative political rhetoric” for its decision to abandon work on one of the most significant discoveries in the North Sea.
The company said it had given up on the Pensacola field because of worsening attitudes to the oil and gas industry amid “ongoing fiscal volatility and negative political rhetoric in the run-up to the July election”.
Jersey Oil and Gas recently also told investors that work on the Buchan field will be postponed for at least a year because of the political uncertainties.
In April, Harbour Energy, the North Sea’s biggest producer, said it would cut a fifth of its workforce because of the windfall tax.
More than 200 oil and gas wells were plugged last year, eight platforms removed and 8,000 tonnes of subsea structures were taken out of the ocean. Another 180 of the UK’s 284 oil and gas fields will close down by the end of the decade.
Northern Producer was built nearly half a century ago as a drilling rig before being converted to an oil and gas processing platform in 1981.
