A decision from North Sea operator Harbour Energy to cut up to 25% of its workforce is a “devastating blow” according to an Aberdeen business leader.
Harbour said it will undertake a review of its North Sea operations in which it expects to cut 250 onshore roles from its Aberdeen headquarters.
In response, Aberdeen and Grampian Chamber of Commerce (AGCC) chief executive Russell Borthwick said he fears the job losses could be “just the tip of the iceberg”.
“This is a devastating blow for the 250 plus families directly affected – and I fear it is just the tip of the iceberg, unless the government changes course,” he said.
Harbour said its decision came in response to the UK government’s “ongoing punitive fiscal position and a challenging regulatory environment”.
© Supplied by Wullie Marr/ DC ThomSince taking office, the Labour party has increased and extended the windfall tax on North Sea oil and gas firms.
As a result, Harbour claims it paid a 108% tax rate on its UK operations in 2024.
The latest job cuts come after Harbour cut 350 jobs in 2023, which means it has shed around half of its workforce since the imposition of the levy.
In another blow to industry, Labour also pledged not to issue new licences for oil and gas drilling during the campaign, a policy it is now consulting with the industry over.
10,000 North Sea jobs lost, AGCC says
The AGCC has been a vocal critic of the windfall tax and its impacts on supply chain firms in the north east of Scotland.
While Borthwick said Labour’s long-term ambitions around clean energy are “laudable”, he said mounting job losses in the oil and gas sector show that “enough is enough”.
“Labour’s long-term ambitions are laudable, but in the absence of a proper industrial strategy, we are left with policies which are destroying a world class British industry,” he said.
© Supplied by AGCC“The UK currently has a crippling 78% tax on North Sea oil and gas, all while importing record levels of foreign energy – with higher emissions – tax free.
“The result is 10,000 North Sea jobs lost since the windfall tax was introduced in 2022.”
Borthwick said the 10,000 jobs lost among North Sea firms is equal to “25 Grangemouths”, a reference to the closure of Scotland’s last remaining oil refinery this year.
He also said the government’s failure it back track-2 carbon capture and storage projects, including Harbour’s Viking development in the Humber, is “now putting people out of work”.
“It is a national scandal which threatens job losses on a scale not seen in decades,” he said.
“These are the very jobs and skills we need to deliver renewables projects when they are available at scale in the years to come.
“Unlike British Steel, this industry does not need a bailout. It simply needs normality restored to the fiscal environment it operates in.”
North Sea backers ‘peddling a fantasy’
Following the Harbour announcement, UK Prime Minister Sir Keir Starmer came under fire from opposition parties at Westminster.
During Prime Minister’s Questions, SNP Westminster leader Stephen Flynn and Conservative leader Kemi Badenoch criticised Labour’s energy policies.
Badenoch said Labour’s clean energy plan is “irrational” and “doomed to fail”, and pointing to recent comments from former Labour PM Tony Blair.
In response, Starmer said North Sea oil and gas will play a role “for many decades to come”, but he stresses that net zero is an “opportunity to be seized”.
“The global race is on for the jobs of the future and I think Britain can win that race”, he said.
In response to the Conservative leader’s comments, environmental campaign group Uplift said Badenoch is “peddling a fantasy” on energy security.
Uplift executive director Tessa Khan said increased North Sea drilling will “do nothing to lower energy bills or boost our energy security”.
“The UK has burned most of its gas and much of what’s left is oil, 80% of which we export,” Khan said.
“The last Conservative government issued hundreds of new licences over the course of 14 years, which have produced just 16 days worth of extra gas.
“And between now and 2050, new licences are expected to provide an extra four days of gas a year. New North Sea drilling is a pipedream.”
Khan said changes to the government’s North Sea policies “would just lock us into an outdated, expensive source of energy” while making oil and gas companies “even richer”.
Government will ‘support workers and communities’
In response to the Harbour Energy announcement, a UK government spokesperson said: “Our thoughts are with any workers affected by this commercial decision, and we will do everything in our power to support workers and communities.
“The government has reformed the Energy Profits Levy to support investment and give industry certainty and stability.
“By making the UK a clean energy superpower, including launching a world-leading carbon capture and storage industry after years of delay, consenting record amounts of clean power, and ending many years of no new nuclear, we will get the UK off dependence on markets controlled by petrostates and dictators, and drive jobs and growth through our plan for change.”
