CAPITAL STRIKE
By JESSICA CLARK
PUBLISHED: 1 July 2024
An energy boss has warned that his firm will prioritise expansion in the US and Denmark as Britain's political parties 'put pain' into the oil and gas industry.
David Bucknall, chief executive of Ineos Energy, said investing in the UK could become 'uneconomic' under Labour's tax plans.
His comments came ahead of the election where energy policy has become a key battleground.
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Mr Bucknall, who runs the energy arm of Sir Jim Ratcliffe's petrochemicals group, said there was greater stability overseas.
His warning comes days after the head of Serica Energy, one of the UK's top independent oil and gas producers, said Britain was 'second only to a war zone' for planning future investment.
Labour has pledged to raise the windfall tax on energy firm profits from 75 per cent to 78 per cent and axe investment allowances.
David Bucknall (pictured), chief executive of Ineos Energy, said investing in the UK could become 'uneconomic' under Labour's tax plans
Mr Bucknall, who runs the energy arm of Sir Jim Ratcliffe 's petrochemicals group, said there was greater stability overseas. Pictured: An offshore oil platform in the North sea
Sir Keir Starmer's party has also said it will not issue new licences for exploration and drilling in the North Sea.
Hundreds of businesses led by the Unite union signed an open letter opposing the policy amid concerns about job losses.
Experts play down fears of further fuel bill hikes as Britain prepares to import a record amount of energy from Europe
Prime Minister Rishi Sunak introduced the energy profits levy when he was chancellor in 2022, and the tax has since been increased and extended.
Mr Bucknall said UK political parties have attempted to outdo 'each other in how much pain you can put into the industry'.
He added: 'If you take away investment allowances and pile on windfall taxes, it's very easy to make things uneconomic'.
His firm will push ahead with expansion in America and Denmark, where it is 'much easier to invest', he said.
Last year Ineos Energy entered the US market for the first time after buying some of Chesapeake Energy's assets in Texas for around £1billion.
Despite political uncertainty in the States ahead of the presidential election in November, Mr Bucknall said the country's energy policy was more stable.
Sir Keir Starmer's party has also said it will not issue new licences for exploration and drilling in the North Sea
Prime Minister Rishi Sunak introduced the energy profits levy when he was chancellor in 2022, and the tax has since been increased and extended
There has not been 'very much change at the operational level in the US, regardless of who the president is', he told The Times.
Last week Ineos Energy was awarded the first onshore carbon capture and storage licence in Denmark.
In the UK, however, the company will focus on developing existing licences rather than launching new projects.
The move comes after David Latin, chairman of Serica Energy, said it was looking abroad for 'acquisition opportunities' due to the windfall levy. Such policies 'are going to drive oil and gas investment overseas, and it will take with it jobs, tax revenues and energy security', he added.
He has previously accused politicians of a 'race to the bottom' to extract more money short-term, despite risking long-term damage to production and making Britain more dependent on imports.
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