Friday 1 April 2011

Oil & gas industry fears for North Sea

The oil and gas industry has expressed concerns about the impact of the Budget on investment in the North Sea.

Industry representatives met with Energy Secretary Chris Huhne, Energy Minister Charles Hendry, Justine Greening from the Treasury and Scottish Secretary Michael Moore to discuss their fears for the oil and gas sector.

Malcolm Webb, Oil & Gas UK's chief executive said: "The meeting recognised the concerns arising out of the new measures in the Budget for gas fields, new field developments, decommissioning, mature fields, infrastructure and the supply chain."

He added that a meeting was being arranged with the Chancellor of the Exchequer: "The Government wishes to engage with the industry to investigate whether the negative impacts of the tax increase can be mitigated. Furthermore, agreement was reached that the Government and industry should work together with a view to ending, by Budget 2012, the instability of the UK oil and gas tax regime and the problems of uncertainty around decommissioning reliefs."

Mr Huhne said the Government was considering the issues raised: "We're listening to that and we want to understand it more carefully with detailed figures. There are elements of what the Chancellor announced which were up for consultation including the issue of the oil price at which the fair fuel stabiliser operates."

The oil and gas industry plan to publish a survey in late April 2011, outlining the impact the tax increase would have on its members' current and future investment if left unchanged.