Oil & Gas

Hunting still committed to Aberdeen despite ‘disaster’ windfall tax

The chief executive of Hunting (LON: HTG) says the energy services group has no plans currently to uproot its Aberdeen operations.

Company stalwart Jim Johnson says “right now” it “still makes sense” for the London-listed firm to have a north-east base in order to service the North Sea.

That is despite recent “disappointing” domestic tax changes, as well as bountiful opportunities in the world’s emerging oil and gas hotspots.

There are widespread concerns that North Sea firms could turn their back on the UK in response to the amplified energy profits levy.

The headline rate of tax on the industry is currently 75%, after the government doubled down on its original windfall tax in November.

Recent research found more than 90% of North Sea oil and gas producers have cut their spending as a result of the levy increase.

‘A real disaster for the UK economy’

“I’m very disappointed in the tax change in the North Sea,” said Mr Johnson.

“I lived in Aberdeen for four years and love the market over there, so I think it’s a real disaster for the UK economy.

“But for us, that’s why we got out of the pipe business, because we were sitting with a lot of capital that we couldn’t make any money – we’re now more service oriented.

“We’re still doing well intervention business in the North Sea. For our Aberdeen business, one of our biggest accounts is in Norway, so we can still use the manufacturing base in the North Sea to service that area, where the market is still relatively strong.

“We’ve got our organic oil recovery, and enough other pieces right now that it still makes sense for us to be there.”

Charting growth plans

It comes as Hunting, which has a north-east base in Badentoy, on the outskirts of Aberdeen, embarks on an ambitious 2030 growth plan.

As part of its goal to become more a “disciplined” company, the group is targeting specific oil and gas and energy transition opportunities in North America, Europe, Middle East and Asia Pacific.

On the low carbon front, Hunting has two focuses; geothermal and carbon capture and storage (CCS), with talk about projects begins now transating into “actual inquiries”.

The strategy was unveiled yesterday, to coincide with the company announcing a return to profit in its 2022 results.

Mr Johnson said: “It’s amazing how things have improved for us year over year, compared to where we were at 12 months ago, with the stress on the business from Covid and supply chain issue. It’s much more refreshing.

“The simple aim of the 2030 strategy is to make sure we’re a company that investors see as viable to invest in the long-term, through upcycles and down. We’re not leaving oil and gas – we love the business – but it’s always going to have a cycle to it.”

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