Windfall tax changes could render North Sea ‘uneconomical’ says Ithaca chairman

LONDON (Reuters) – Any changes to Britain’s oil and gas windfall tax law that would remove incentives to invest in the North Sea would make field developments in the ageing basin “uneconomical”, the chairman of newly-listed Ithaca Energy said on Wednesday.

Ithaca made a lacklustre debut in London on Wednesday as the North Sea oil and gas producer defied volatile markets to complete Britain’s largest initial public offering of 2022.

Among the headwinds facing Ithaca and rivals is the Energy Profits Levy that the British government introduced in May to levy a 25% windfall tax on North Sea producers in the face of soaring energy costs.

Ithaca Chairman Gilad Myerson told Reuters that any changes to the law should maintain incentives to invest.

“The government has structured the EPL in a very thoughtful manner to continue to promote investment in the North Sea… If however, they take away the investment allowance, than obviously it will become uneconomical to develop fields in the North Sea,” Myerson said.

He also said that over the past few years, Ithaca has focused on buying and boosting the performance of assets but that it is now moving into “a different phase, we’re ready to focus on building these assets.”

Ithaca plans to make a final investment decision on the Cambo field in 2023, he added. The ownership of the field remains unclear however as Shell is seeking to sell its 30% stake in the field.

(Reporting by Ron Bousso; Editing by Jane Merriman and Alexander Smith)