Jim Ratcliffe, the founder and chairman of UK energy company Ineos, fears for the future of the North Sea due to the UK government’s 75% windfall tax on oil and gas producers.

“The UK has hiked the tax take in the North Sea from 40% to 75% and we are now seeing many operators pausing or cancelling their investment plans," Ratcliffe said in a statement issued by Ineos.

"The big winners are in the US where operators in the Gulf of Mexico can pay just 37% tax and investment is at its highest level for a decade.”

He said the UK now imposes three taxes on producers — a 30% corporation tax, a 10% supplementary charge and the 35% Energy Profits Levy introduced last year.

Ineos said it owns 100% of the Forties Pipeline System, which is the largest oil and gas pipeline system in the UK North Sea.

The system links about 85 fields in the North Sea and gives Ineos “a unique view” into the development plans of the oil and gas operators that use the pipeline.

Ratcliffe said: “In the UK, we have seen perpetual tinkering with tax rates and now a massive tax hike. What the country needs is energy security, which means encouraging developments in our strategic energy reserves in the North Sea, not taxing it out of existence and shutting down the basin.”

Describing the windfall tax as “primitive politics”, Ratcliffe added that there had been no thought given to the long-term consequences of the “tax it to death” move.

“Taxes are now so high that profits no longer fund future investments and on top of this, new investments have poor returns with invariably high tax rates,” he said.

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UK North Sea producers being ‘taxed to death’ - Jim Ratcliffe