Responding to BP’s announcement that along with its partners, it is investing £10 billion in UK oil and gas developments over the next five years, Malcolm Webb, Oil & Gas UK’s chief executive, said: “The news of this significant investment in the UK’s oil and gas is a boon for the economy and our energy security. It  illustrates what a force for growth and jobs the UK oil and gas industry is and highlights its role in fostering excellence in engineering and technology.

“While developments such as BP’s, with robust economics and significant volumes of oil and gas, are securing investment, there are smaller projects with more marginal economics that are struggling. While we believe that up to 24 billion barrels of oil and gas are still to be extracted, there is evidence that,  following the tax increase announced earlier this year, well in excess of one billion barrels of the UK’s oil and gas resource are ‘fiscally stranded’ which is to say that the current tax system renders them uncommercial. Oil & Gas UK is therefore working closely with the Government, both to find ways to stimulate investment in these developments and also to resolve uncertainty around the availability of relief on decommissioning costs. We are working towards a positive conclusion on both these issues for Budget 2012. If we are successful in this joint and collaborative endeavour with the Government, it will provide a significant boost to investor confidence and deliver investment, growth and jobs to the UK economy.”

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