Tax breaks fund EnQuest North Sea investments

Oil producer EnQuest is looking to invest further in the North Sea after tax breaks on its recent developments allowed it to retain more profits in the first half of this year.

The group’s average production has been lower this year, at a little over 20,000 barrels of oil equivalent a day, and that meant profits for the six months to June were 10 per cent less than a year ago at $193 million (£123m).

But with its effective tax rate halved thanks to allowances on its investment in developing a number of North Sea fields, profits after tax leapt from $69m to $129m.

Chief executive Amjad Bseisu said the firm had made significant progress in business development, with the group signing six major deals, and made strides to advance the Kraken field development plan it is working on with partners.

The group, spun out of services firm Petrofac, has also applied for a number of new blocks in the UK’s latest licensing round.

Bseisu said EnQuest was looking for further opportunities, with a $900m debt facility, more than $90m in the bank and $240m cash flow to feed investment. He said the firm is also seeking a licence to operate in Norwegian territory.

“We have grown our development capability significantly, with employee numbers now approaching four times the level of two years ago,” added Bseisu.