Harbour Energy, a major oil and gas producer based in Kingswells, Aberdeen, has announced plans to cut around 250 jobs in the city. This decision follows a strategic review of its UK operations, influenced by ongoing regulatory challenges and what the company describes as “punitive” government measures.
Reasons for Job Cuts
The company has cited the UK’s Energy Profits Levy, commonly referred to as the windfall tax, as a primary factor affecting its profitability and investment plans. Introduced by the Conservative government in 2022 and strengthened after Labour came to power, the levy has been criticized by Harbour Energy for creating a challenging fiscal environment.
Scott Barr, Managing Director of Harbour Energy’s UK division, stated that the review was necessary to align staffing with the current lower investment levels. The job reductions in Aberdeen are in addition to the 350 UK onshore jobs that were cut in 2023.
Industry Reaction
The Aberdeen and Grampian Chamber of Commerce (AGCC) has expressed concern over the job losses, describing the news as a “devastating blow” to the affected families. Russell Borthwick, AGCC’s Chief Executive, remarked that this could be just the beginning of broader challenges within the oil and gas sector in the region.
Government Stance
The UK government has defended the Energy Profits Levy as a necessary step to ensure that North Sea oil and gas producers contribute fairly to the transition towards sustainable energy. In addition, the government has emphasized its commitment to Aberdeen by establishing the headquarters of Great British Energy in the city and launching a national wealth fund to support investment in renewable energy.
Impact on Aberdeen
Harbour Energy’s decision marks another significant reduction in the oil and gas workforce in Aberdeen, a city that has long been a hub for the UK’s energy sector. The reduction in jobs highlights the ongoing struggle between traditional energy companies and evolving governmental policies aimed at addressing climate change.
Future Outlook
Despite the challenges, Harbour Energy has stated that it remains committed to the North Sea operations, although it has warned of continued difficulties if the current fiscal environment persists. The company is expected to focus on optimizing its existing assets while assessing international opportunities to mitigate risks.
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FAQs– Harbour Energy
Q1: Why is Harbour Energy cutting jobs in Aberdeen?
Harbour Energy is cutting approximately 250 jobs in Aberdeen due to reduced investment levels, primarily caused by the UK’s Energy Profits Levy and challenging regulatory conditions.
Q2: What is the Energy Profits Levy?
The Energy Profits Levy, also known as the windfall tax, is a fiscal measure introduced to ensure oil and gas producers in the North Sea contribute fairly to the energy transition.
Q3: How many jobs has Harbour Energy cut in total?
Including the newly announced 250 job cuts, Harbour Energy has cut a total of 600 UK jobs, with 350 onshore positions eliminated in 2023.
Q4: How has the local community reacted?
The Aberdeen and Grampian Chamber of Commerce has described the job losses as a “devastating blow” to the affected families and warned that more challenges may lie ahead.
Q5: Is Harbour Energy planning to continue operations in the UK?
Yes, despite the job cuts, Harbour Energy remains committed to its North Sea operations but is also evaluating international opportunities to reduce financial risk.
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