Oil & Gas UK has welcomed the Chancellor's announcement of incentives to stimulate investment in small and challenging projects on the UK Continental Shelf (UKCS), but added that in order to maximize the recovery of the nation's oil and gas, further measures to help existing fields also need to be urgently brought forward.
Malcolm Webb, Oil & Gas UK's chief executive, said, "We acknowledge this demonstration of the Government's commitment to the future of this industry in the UK. The measures announced today are a positve step for those companies trying to develop small and challenging fields in this mature, high cost province. However, we now need to direct our attention to sustaining and promoting investment in and around many of our older fields to prolong their lives, to stimulating exploration activity and to opening up the frontier areas west of Shetland and in that regard, we welcome the Government's offer of a continued dialogue.
"The various technical improvements to the tax regime also announced today are the result of a constructive and detailed dialogue between the industry and the Treasury.
"We must not forget that a number of small companies involved in exploration, the lifeblood of the industry, are suffering severely from the lack of access to equity markets and we regret that the Chancellor did not act on our recommendations to improve funding of this crucial activity.
Mr. Webb concluded, "This Budget is a step in the right direction. The Government has recognised that reducing the tax burden on UKCS production will enhance the recovery of this nation's indigenous oil and gas reserves and increase the overall economic benefit to the UK. This can only help to improve the outlook for the energy security of this country. It is crucial that the dialogue between industry and Government continues, so as to deliver that prize."
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