Rosebank and Cambo oil company Ithaca Energy is preparing to substantially up its stake in the North Sea despite bitter disquiet throughout the industry over the extension of the UK’s Energy Profits Levy (EPL).

In a striking contrast between words and actions, Israeli-owned Ithaca revealed this morning that it is in exclusive advanced discussions to acquire nearly all the upstream assets of Italian rival Eni. Under the terms of the agreement Ithaca would take over four key production hubs and assume control of Neptune Energy, which was acquired by Eni earlier this year, giving Ithaca a share in six of the 10 largest fields in the UK North Sea.

The announcement came as Ithaca also posted a slump in profits for 2023, which it blamed in large part on the UK government’s energy tax.

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In his Spring Budget earlier this month Chancellor Jeremy Hunt announced that the EPL, introduced in May 2022 to tax exceptional profits arising from the surge in energy prices, would be extended to a sunset date of March 2029. Ithaca and others throughout the sector have warned that the EPL is forcing companies to scale back on activity in the UK.

“The Energy Profits Levy continues to have a direct impact on investment in the UK North Sea, with projects across our operated and non-operated deferred or cancelled,” Ithaca interim chief executive Iain Lewis said this morning.

Why then the move to snap up Eni’s assets? Well, according to Ithaca executive chairman Gilead Myerson, there is “significant development opportunity”.

That’s not what the environmental activists who have vehemently opposed Rosebank and Cambo want to hear, but Ithaca – which is 89% owned by Israel’s Delek Group – has proven adept at holding its own.

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Last year, former chief executive Alan Bruce wrote to First Minister Humza Yousaf to say he was “extremely disappointed” about the party’s opposition to Rosebank, the largest untapped oilfield in UK waters. The development, which is led by Equinor, was subsequently given the go-ahead by the North Sea Transition Authority in September.

Ithaca is the prospective developer of Cambo, another key environmental battleground, and is said to be seeking approval for the project before an autumn General Election.

The company will no doubt press home the point that Cambo would be a huge shot in the arm for UK oil production which is now at its weakest this century, having fallen to two-fifths below 2019 levels in the second half of last year. And for their part, it’s difficult to imagine UK ministers are inclined to kill the goose generating those golden EPL windfalls.