An industry report from Oil & Gas UK has called for tax incentives to fuel the recovery all the remaining oil and gas that is thought to exist offshore in the North Sea.
The industry body believes there might be as much as 24 billion barrels but warns that recovery is unlikely unless a further £1 trillion in investment is piped in to encourage production by UK Continental Shelf drill workers.
Malcolm Webb, chief executive of Oil & Gas UK, said: “Maximising recovery from the UKCS is the collective responsibility of all those who fund, regulate, tax and operate the offshore oil and gas industry and achieving our full potential will require a tremendous effort on the part of everyone involved.”
“Our industry makes far too important a contribution to the economic and energy security of the nation to be allowed to falter at this critical point.”
Michael Tholen, Oil & Gas UK’s economics director, added: “We need a lighter tax burden, a simpler and more predictable system of field allowances and fiscal support for exploration. The outcome of the Fiscal Review, expected to be announced in December this year, must be relevant, radical and robust.”
The report shows that North Sea oil and gas production is set to increase this year for the first time since 1999, but warns that activity will once again decline unless costs are brought under control.
