Tax changes could boost investment in North Sea exploration

11 July 2012

Posted by Kim Bardsley

Changes to tax rules announced this week by the government could lead to more investment in North Sea oil, which may provide a boost for the heating oil industry.

The Treasury stated measures such as the creation of Decommissioning Relief Deeds will provide greater certainty to the sector, which had complained the cost of winding down ageing installation was hindering their future plans.

Executive secretary at the Treasury Chloe Smith said: "This is great news for jobs not just in the North Sea, but across the UK."

It was suggested by the Scotsman that this could lead to an extra £40 billion being pumped into oil and gas developments in the North Sea and comes shortly after Norwegian firm Statoil confirmed it will increase its investment in the area to £18 billion.

The government's initiative was welcomed by trade body Oil & Gas UK, with the group's economics director Mike Tholen saying it will provide long-term confidence that will ensure activity continues in the North Sea for many years to come.

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