The North Sea boss of Apache has grilled a trio of politicians on the windfall tax as uncertainty remains around Labour’s future policy on the levy.
Jillian Owen, UK country boss for the US oil firm, spoke out at a live recording of the Holyrood Sources podcast in Aberdeen on Tuesday night, with MSPs from the SNP, Scottish Conservatives and Scottish Labour.
Apache (NASDAQ: APA) has ceased drilling in the UK and has been making rounds of job cuts citing the Energy Profits Levy (EPL) for creating challenging market conditions.
Ms Owen said: “I think you’ve all said hydrocarbons are important, they’re here to stay, we need it for the future, it’s part of the energy mix, so what are you doing about the Energy Profits Levy? Because clearly that’s driving out investment here in the UK.
“Unfortunately it’s having a real knock-on impact to the industry. To talk about Apache – we stopped drilling in the North Sea, we’ve downmanned our drilling rigs, we’ve reduced our workforce, unfortunately, and a lot of that is because of the impact of the Energy Profits Levy.”
© Supplied by SystemNorth east Conservative MSP Douglas Lumsden, whose party in Westminster introduced the tax measure, said: “As a north-east MSP, I’m not going to stand up for the UK Government here. I’m completely against the EPL.
“But I can understand why it taken in at the time. Energy bills were going through the roof and there was money required to offset some of that huge increases.”
A general election is coming up
Mr Lumsden said Scottish Conservative leader, Douglas Ross, has been making representations to have the levy scrapped.
Apache is among several operators which have cut spending over the measure, with Harbour Energy also having made job cuts.
Ms Owen went on to query Labour for answers, as “a general election is coming up and that is where a lot of the uncertainty lies for investment in the UK”.
Sarah Boyack, Scottish Labour MSP for Lothian, said the EPL was “brought in at a time when costs for households had absolutely rocketed”.
However, pushed several times on what would need to happen for the EPL to be cut, Ms Boyack deflected.
“I think it’s a question of the government working with industry and also getting those bills down, it’s a combination,” she said.
Asked about the frustration in the room, she added that the “difficult questions” are among the items she’d take away from the event.
‘Presumption against’?
© Supplied by AGCCSNP energy minister Gillian Martin also received a grilling on the podcast as her government prepares to publish Scotland’s energy strategy in the summer.
The draft document contains a “presumption against” further exploration, which was a running topic of the night, and she would not answer probes on whether that wording will be in the final strategy.
“I think we’ve become very hung up on those two words at the expense of actually having a nuanced conversation about what that means,” said Ms Martin.
“Every licence application is a presumption against. You have to have conditions met in order to get a licence. Your driving test is a presumption that you will fail if you don’t do everything correctly. “
“So a presumption against – I don’t like using it so much and I don’t like hearing about it all the time. Not because its politically uncomfortable for me , but I feel we’ve almost hung our hat on it too much.”
Ms Martin insisted it is “not a carte blanche situation where there won’t be any exploration” but will depend on the situation at the time and the country’s energy security needs.
She called for a global standard to be set for oil and gas climate checkpoints to hit net zero “because them we know what’s acceptable and what’s not acceptable”.
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