Sunak urges banks to continue financing oil and gas companies after windfall tax | Oil and gas companies


Rishi Sunak has called on Britain’s biggest banks to keep the money taps going to the oil and gas sector after slapping it with a windfall tax.

At a deadly meeting in Aberdeen on Thursday, the Chancellor told oil and gas executives he was trying to ensure investment in their businesses was not cut.

Sunak visited the center of Scotland’s oil industry to discuss Britain’s energy security and the Energy Profits Tax. The North Sea Excess Profits Tax was introduced last month in a bid to raise £5billion to reduce household bills.

But oil and gas companies, including BP and Shell, have warned that the tax could affect investment in renewables.

Sources who attended the meeting at the Net Zero Technology Center said Sunak told those gathered that he had asked lenders to ensure oil and gas companies had access to capital.

It is understood that attendees, which included executives from BP, Shell, Harbor Energy and Ithaca Energy, raised a range of concerns about the tax during the hour-long meeting.

An Ithaca Energy executive told the chancellor that the windfall tax had made its planned investments in the Cambo, Rosebank and Marigold fields more complex.

One attendee said: “He came to the meeting with bright eyes and a fluffy tail and left with his tail between his legs. It would have been a rewarding experience.

The windfall tax was only implemented after a U-turn by Sunak and Boris Johnson, who had argued it would hurt investment.

It is understood that Sunak told the executives that he does not consider the levy to be a “permanent item”. The tax is expected to be in place until normal market conditions return to the oil and gas sector or by the end of 2025. The Guardian revealed this week that Harbor had lobbied the government to bring forward that date by two year.

Leaders want the government to commit to a timetable to review market conditions and for an investment allowance included in the tax to be backdated to cover projects in which investments have already been made but have not yet been made. oil and gas product. They also want dismantling costs to be included in the allowance.

After meeting leaders, Sunak then addressed young members of industry at a Treasury Connect event, discussing jobs and future prospects while holding a mug adorned with the Scottish flag.

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Separately on Thursday, Business Secretary Kwasi Kwarteng set out his plans to ensure Britain has enough household power for this winter. In a speech to the Chatham House Second Century London Conference, he said talks were underway to keep coal-fired power stations in Yorkshire and Nottinghamshire open for longer.

European countries are scrambling to replace Russian gas as Vladimir Putin turns the screw on foreign energy supplies. Kwarteng said: “We cannot – and will not be – blackmailed by dictators who have their hands on the gas taps.”

The Treasury declined to comment.


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