Malcolm Webb, Oil & Gas UK’s chief executive, said: “In its first Budget nine months ago, the Government recognised the importance of a ‘stable’ UK oil and gas tax regime which provided ‘certainty for investors’.  Given that assurance, the industry is shocked to now be hit by a tax increase that raises the tax rate to at least 62 per cent, with some of the most mature and therefore vulnerable fields now paying up to 81 per cent.

“Today’s move in the Budget runs counter to the Government’s stated desire to promote growth, jobs and exports – all of which this industry was delivering and will now find much more difficult to sustain. Importantly it will also most likely increase this country’s dependence on imported oil and gas and thus diminish its energy security.

“At a time when we could see investment recovering following the last period of fiscal instability, this further shock will only damage investor confidence and make many question whether the UK is an appropriate destination for their investment. Many of our members will now be reappraising their investment decisions.

“The UK offshore industry currently accounts for a third of total industrial investment in this country.  This investment supports nearly half a million jobs, drives major technological advances and makes us a global leader in the export of oilfield goods and services.  Last year, 60 percent of the UK’s total energy requirements were met by oil and gas produced from our own reserves.

“In summary, this change in the tax regime will decrease investment, increase imports and drive UK jobs to other areas of the world.”

Ends  

For more information please contact Sally Fraser on 020 7802 2404.

Note to Editors

Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its members, who number over 110, are companies licensed by the Government to explore for and produce oil and gas in UK waters and those who form any part of the industry’s supply chain.

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