North Sea oil and gas industry leaders in Aberdeenshire have mounted a last ditch bid to avert tax increases, which may have been undermined by leading players in the area.

Prime Minister Rishi Sunak is expected to increase the rate of the windfall tax he introduced while serving as chancellor in May as he looks to fill a £50 billion hole in the public finances.

Such a move would be popular with many people amid widespread resentment about the amounts oil and gas firms are making following the surge in prices fuelled by the war in Ukraine. This has left consumers facing huge increases in their energy bills.

The clamour for tax rises intensified after Shell and BP posted third quarter profits of $9.5bn (£7bn) and $8.2bn respectively.

In the fiscal statement due on November 17, the Government is thought likely to increase the rate of the Energy Profits Levy from 25 per cent to 30% and to extend it to 2028.

The talk has caused huge concern in the Aberdeen heartlands of the oil and gas industry where the mood appears to be combative.

Aberdeen and Grampian Chamber of Commerce said the North Sea industry was already “contributing enormously to the financial help being offered to businesses and families, while at the same time working tirelessly to increase the UK’s domestic energy production”.

The chamber reckons the industry has paid £8bn taxes in the first nine months, up around 700% on the same period last year.

“The suggestion that their reward for this should be a second windfall tax is, frankly, outrageous,” said policy director Ryan Crighton

Noting that firms in other industries such as banking have been making big profits lately, Mr Crighton added : “When we need more investment than ever before in our energy sector, this feels like a gamble by the UK Government. If singling out this one industry backfires, then there will be huge consequences for the North-east of Scotland.”

The warning a windfall tax rise could scare off investors was echoed by the biggest independent operating in the North Sea, Harbour Energy.

Chief executive Linda Cook said the introduction of the profits levy and speculation about further changes have created uncertainty.

She added: “Evaluating expected returns from long term investments has become more difficult and investors are advocating for geographic diversification.”

The comments came in a trading update in which Harbour noted it expects to incur a $900 million UK tax bill this year including $400m in respect of the windfall tax.

That sounds like a lot of money but won’t go far to help the millions of consumers who are struggling in the UK.

Harbour shareholders have enjoyed payouts totalling $500m already this year. In June Harbour started a $200m share buyback programme, which reflected confidence in its prospects.

The trading update underlined how much money Harbour is making in the North Sea, which accounts for 90% of its production.

Harbour expects to generate around $2bn cash from operations this year, net of tax payments.

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When numbers like that are involved some might wonder what sort of returns Harbour thinks it should be able to achieve on its investments in the UK.

Mr Sunak might feel he can afford to call oil firms’ bluff regarding threats to shift investment overseas when other countries are also raising taxes.

US president Joe Biden has said oil giants have enjoyed a “windfall of war” and has threatened to impose a levy on the sector if firms don’t do more to help consumers.

The EU plans to make oil and gas firms make a “solidarity contribution” worth 33% of excess profits.

Formerly known as Chrysaor, Harbour won backing from US financiers to acquire a $3.8bn North Sea portfolio from Shell during the last downturn.

In its third quarter results, Shell provided ammunition for those who want North Sea taxes increased by revealing it has not had to pay anything in respect of the EPL so far.

That reflects the benefit of the allowance that Mr Sunak also introduced in May, under which firms can set investment in new assets against the taxes payable on profits. The Government says firms get a 91p tax saving for every £1 they invest.

Shell has invested in boosting output from fields such as Pierce recently.

Firms that have made profits on North Sea production without investing enough in assets have not been spared the impact of the new levy. BP expects to pay $800m windfall tax this year.

Shell has not paid any tax on its UK production profits for years on a net basis because it has been able to offset the costs of decommissioning the giant Brent field against its bills.

Its chief executive Ben van Beurden appears to have had a rethink about taxes after toeing the industry line on the danger of windfall levies before Mr Sunak’s move in May.

After Shell’s Q3 results Mr van Beurden results told journalists oil and gas firms must “embrace” higher taxes.

Noting the “societal reality” that governments should try to help the vulnerable, he observed: “They will be looking at companies like us who benefit of course from the volatility and the prices that we see to fund the programmes that they are rolling out. I think we have to accept it.”

Mr van Beurden stressed governments also need to ensure the tax system encourages investment in oil and gas production and renewables.

Shell’s experience suggests the allowance introduced by Mr Sunak is having that effect, even if this year’s price rises have not prompted the firm to revive plans to develop the controversial Cambo field off Shetland, which it dropped last year.

However, the firm that is now leading plans to develop Cambo, Ithaca Energy, looks set to win a notable vote of confidence from financiers.

Israeli-owned Ithaca acquired a controlling stake in Cambo through the takeover of Siccar Point Energy last year for an initial $1.1bn and looks keen to develop the field. Cambo could benefit from Mr Sunak’s investment allowance.

City sources have said investors look ready to pay more than $300m in total for shares in Ithaca as part of a stock market flotation that is likely to value the firm at more than $3bn. The related share offer is set to be over-subscribed.

That does not suggest there is huge concern in the Square Mile about the potential impact of an oil and gas windfall tax increase.