Harbour Energy, the largest British North Sea oil and gas producer, saw its shares plunge 13% after windfall taxes wiped out profits.

CEO Linda Cook warned that waiting until 2030 for the UK government’s windfall tax to expire would do irreversible damage to Britain’s oil and gas sector.

Harbour reported a profit before tax of $1.2 billion (2023: $0.6bn) which turned into a loss after tax of $93 million (2023: $45m profit) reflecting a 108% effective tax rate (2023 restated: 93%). Its tax bill more than doubled to $1.31bn from $571m a year ago.

In a media call, Ms Cook said:  “This is the third year now, every year since the introduction of the EPL, our effective tax rate has been higher than 100%. So clearly the EPL is not just taxing windfall profits, it’s taxing all of our profit.

It is proposing a final dividend of 13.19 cents per share, up from 13 cents per share the prior year.

The UK government intends to overhaul the windfall tax regime on oil and gas producers once current levies run out in 2030, as it vowed to transform the North Sea into a renewables hub.

In October, the government raised the tax to 38% from 35%, taking the headline rate on the sector to 78% – among the highest in the world.

It is now asking industry players and others to provide feedback until 28 May.