(MENAFN- ProactiveInvestors)
The government has moved to sweeten the deal for oil and gas companies in a bid to attract investment into the North Sea.
It comes as Brent crude continues to plunge below US$70 per barrel and the North Sea tax receipts are set to dwindle.
On Wednesday as part of George Osborne’s Autumn statement North Sea oil firms were promised a 2% cut to the supplementary charge down to 30% and today Danny Alexander chief secretary to the Treasury unveiled more tax breaks.
A new investment allowance which can be more broadly applied replaces the prior field allowance system.
There were also specific incentives for explorers such as support for those carrying out seismic programmes in under explored areas.
Alexander said the “ambitious package” of fiscal reforms would support the sector which he called “hugely valuable”.
“We’re incentivising and working with the industry to develop new investment opportunities and support new areas of exploration” he said in a statement.
“This will help ensure that the industry continues to thrive and contribute to the economy.”
Priti Patel exchequer secretary said the new government measures are expected to drive additional investment in the order of £7bn.
According to Malcolm Webb chief executive of industry group Oil & Gas UK the government must now move swiftly act upon the proposals because of the challenges currently facing North Sea companies.
Michael Tholen Oil & Gas UK’s economics and commercial director said: “we are all in agreement that actions speak louder than words.
“There is no time to delay we are at a critical stage in the life of the North Sea and look forward to the Chief Secretary’s proposals being swiftly implemented.”
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