Oil industry: 'Government must provide incentives'

9 July 2008

Oil and Gas UK has called for government incentives for companies investing in developing North Sea oil fields.

The offshore industry trade body estimated that there are 25 billion barrels to be recovered in the area but at current investment rates only ten billion will actually be pumped.

Chief executive Malcolm Webb issued a challenge to the government to encourage funding, adding: "Whilst realising this goal will require massive further investment from the industry, at $100 (£50.78) per barrel it is worth $1.5 trillion to the British economy and this is a prize which the country should not contemplate losing."

Last week the chancellor, Alistair Darling, called for increased production in the UK as the cost of a barrel of crude oil reached nearly $146.

The prices of fuel and home heating oil are expected to soar due to the effects of the market.