A 48-year-old former oil platform in the North Sea has been demolished after a threatened Labor tax attack on the sector causes a slump in fossil fuel activity in British waters.
The Northern Producer platform was demolished with multiple high explosive blasts last week due to a lack of interest.
Last year it was brought ashore at the port of Kishorn in Scotland for a refit pending re-deployment.
However, a tax attack on the oil and gas industry has made the platform obsolete.
Companies have scaled back investment or left the North Sea because of the government’s windfall tax and Labor’s threats to increase it.
The government introduced a windfall tax on oil and gas profits two years ago, raising the marginal tax rate to 75%.
Labor wants to increase it further to 78% and has said it would ban new oil and gas exploration in British waters. The demolition of Northern Producer coincided with the publication of the Labor manifesto.
The proposals have prompted several companies to walk away from projects in the North Sea.
Deltic Energy, led by a Labor campaigner, recently blamed “negative political rhetoric” for its decision to halt work on one of the North Sea’s most important discoveries.
The company said it abandoned the Pensacola field due to deteriorating attitudes toward the oil and gas industry amid “ongoing budget volatility and negative political rhetoric ahead of the July elections.”
Jersey Oil and Gas also recently told investors that work on the Buchan field will be delayed for at least a year due to political uncertainties.
In April, Harbor Energy, the North Sea’s largest producer, said it would cut a fifth of its workforce because of the windfall tax.
Last year, more than 200 oil and gas wells were plugged, eight platforms were removed and 8,000 tons of subsea structures were removed from the ocean. Another 180 of Britain’s 284 oil and gas fields are set to close by the end of this decade.
Northern Producer was built almost half a century ago as an oil rig before being converted into an oil and gas processing platform in 1981.
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