A spate of North Sea deals has provided further signs that industry warnings about the windfall tax are overblown as the shock Opec+ cut in production volumes underlines the value of UK resources.

The international cartel caused consternation last weekend when it announced that daily output would be cut by around 1.2 million barrels daily in a move that sent oil prices surging.

The price of Brent crude rose from $79 per barrel to around $85/bbl, putting North Sea players in line for another year of bumper earnings. Firms operating in the area enjoyed a bonanza last year amid the surge in oil and gas prices fuelled by Russia’s war on Ukraine.

Big North Sea operators such as Harbour Energy are producing oil and gas at less than $15 per barrel oil equivalent. Their profit margins would be the envy of firms in other industries.

READ MORE: North Sea giant's boss set for £3m share awards amid windfall tax row

The latest rise in prices will probably be bad news for consumers who are grappling with the huge increases in energy and fuel bills that have been one consequence of Russia’s actions.

As a major producer, Russia will benefit from the latest price rises as it develops new markets for its output to compensate for curbs imposed by the US and Europe.

It has cooperated with Opec since members acted to offset the disastrous impact of the pandemic.

The recent production cuts sent an alarming signal regarding the geopolitical outlook. Following calls by President Biden for Opec to boost output to help keep a lid on prices, the Saudis appear to be defying the US as they look to strengthen ties with Russia and China.

The kingdom’s economic ambitions may require it to keep prices higher than western powers had hoped.

The Opec+ move will increase the import bill for the UK and may leave some concerned about the potential for disruption to supplies resulting from political machinations.

It came amid a flurry of deal activity in the North Sea where big investors are positioning themselves to boost production to capitalise on expected strong global demand in coming years.

READ MORE: London oil traders are going large on the North Sea

North Sea industry leaders have claimed the windfall tax the Government introduced last year would lead to an exodus from the area as firms looked to shift investment to other markets.

Anger intensified after the Chancellor disappointed hopes that he would include a mechanism to cut the windfall tax burden if prices return to ‘normal’ in his recent Budget.

Harbour rammed home the point last week when it announced plans for 350 jobs cuts in a programme that will take a heavy toll on Aberdeen.

However, the edge of Harbour’s attack may have been blunted by the decision to confirm the cuts the day after it revealed that chief executive Linda Cook was in line for £3m share awards under pay schemes that suggest the firm expects to make plenty of money in the North Sea over the next few years.

Faux outrage about the windfall tax looked less and less convincing last week as deep-pocketed players proceeded to double down on the North Sea.

On Wednesday London-based Viaro Energy announced that it was buying into more acreage in a deal with Australia’s Hartshead Resources that could be worth more than £100m.

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The firms plan to redevelop two gas fields that were taken out of production in 2015.

They expect to achieve first production in 2024, well before the current expected  end date for the windfall tax in March 2028.

Viaro bought West of Shetland assets in March, when it said it could invest more than £200m in developing a find on the licence concerned.

The recent deals support Viaro’s plan to use acquisitions to help it become a significant player in the North Sea exploration and production business after prospering in the global oil trading business.

Viaro may have decided to accelerate its growth drive to capitalise on the generous investment allowance the Government introduced alongside the windfall tax to encourage firms to develop new North Sea fields.

Hartshead noted that other firms are eyeing North Sea assets as they look to make the most of the allowance, under which firms can set 91 per cent of the relevant costs against their tax bills.

READ MORE: North Sea firm recruits heavy hitter as it eyes acquisitions

The day after Viaro announced the Hartshead transaction a firm that is facing tax increases following the introduction of the windfall tax completed a notable North Sea deal.

NEO Energy, which is backed by Norwegian private equity investors, has decided to buy into a plan developed by a relative minnow to bring a venerable field in the Cromarty Firth back into production.

It is buying a stake in Jersey Oil and Gas’s Buchan Area development in a deal analysts reckon could be worth around  $170m.

Buchan was taken out of production by Repsol Sinopec in 2107 but Jersey reckons more than 100m barrels oil could be produced from the field and other assets in the area. These include the Verbier find it made with the former Statoil in 2017.

Jersey faced huge challenges during the turmoil triggered by the pandemic as it tried to advance a plan that will involve developing a major new production hub. Work on this could generate lots of jobs in the supply chain.

The Buchan area development should benefit from the investment allowance introduced last year.

READ MORE: North Sea believers vindicated amid Ukraine war fallout

It is notable that NEO decided to buy into the Buchan plan after building a big portfolio of producing assets in the UK North Sea through acquisitions during the pandemic. The firm underlined its status as a significant player in the area in 2021 by acquiring a $1bn portfolio of production assets from US giant ExxonMobil.

The increase in taxes on production that will follow the imposition of the windfall levy does not appear to have dented NEO’s enthusiasm for the UK North Sea.

NEO’s growth has been funded by HitecVision, which owns a range of oil and gas assets in Norway, where firms pay a 78% tax rate. Following the hike in the windfall tax, the top rate in the UK is 75%.

With investors showing such enthusiasm for the North Sea Scotland’s new first minister, Humza Yousaf, must decide whether he is prepared to jeopardise the area’s prospects by maintaining the SNP Government’s opposition to exploration activity, which looks intended to keep the Greens sweet.