Responding to Chancellor Alistair Darling's Pre-Budget Report, Oil & Gas UK's chief executive, Malcolm Webb, said, "Oil & Gas UK is encouraged to hear of the Chancellor's commitment to working closely with the UK oil and gas industry to put in place the right incentives to increase production from marginal oilfields. We look forward to engaging with the Treasury on its new consultation published today, entitled 'Supporting investment: a consultation on the North Sea fiscal regime'.
"Such measures are imperative if we are to maximize recovery of the nation's oil and gas reserves and enhance the UK's security of energy supply in the years ahead.
"Indeed, Oil & Gas UK wrote to the Chancellor in the run up to the Pre-Budget Report reiterating its concern that too many North Sea fields have been failing to attract investment even in the previous high oil price environment, thus exacerbating the UK's production decline rate. We also highlighted the urgency with which investment incentives needed to be established in order to turn this situation around. We are encouraged that the Chancellor seems to agree with us.
"The Treasury's proposal for a value allowance announced today, if of the right size and structure, could make a material difference to the future of the North Sea.
"Time is pressing so we welcome the Treasury's intention to include measures in the 2009 Budget. We will certainly respond within their timetable."
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