Serica Energy calls for government action on North Sea taxes

Serica Energy PLC, which today landed approval for a new North Sea field, has called on the UK government to reform the oil and gas tax regime.

Companies like Serica pay around 75% on their oil operations, following the so-called ‘windfall’ tax introduced as crude oil and gas prices previously soared with the start of Russia’s war in Ukraine.

Now, the proponents of the industry claim that the high rate of tax is resulting in insufficient investment in domestic oil and gas interests, and that’s a risk to Britain’s energy security.

“We look to the UK government to implement tax and licensing arrangements that support investments like Belinda, thereby creating UK jobs, earnings and tax receipts instead of increasing reliance on energy imports,” Serica’s chair and interim CEO David Latin said, as the company announced the approval for its Belinda field development.

Belinda, 100% owned by Serica, is expected to be connected to the Triton floating production, storage and offloading (FPSO) vessel, once a development well scheduled for early 2025 has been drilled and completed.

It is a bolt-on operation, expanding upon and extended the life of the Triton infrastructure, to unlock some 5 million barrels of reserves. First production is slated for the first quarter of 2026.

Belinda was approved earlier today, by UK oil and gas regulator North Sea Transition Authority.

"We are delighted to have received approval to develop Belinda,” David Latin said.

“This will build on our strong track record of delivering growth and adding value through investment in our assets.

“We have further potential projects in our portfolio which we continue to assess, including the possible re-development of the Kyle field, which could, like Belinda, be another low emissions tie-back candidate to the Triton FPSO.”

Panmure Gordon analyst Ashley Kelty described Belinda as “a nice accretive development” with low capex costs and a reduced development timescale.

In London, Serica shares were up slightly changing hands at 182.10p each.

Read the latest issue of the OGV Energy magazine HERE