New UK Government Policy To Boost North Sea Sector That Peaked 8 Years Ago - Tax Cuts!!!

Oil industry leaders are anticipating more North Sea tax relief after the first signs of a Government U-turn. Modest tax changes were announced yesterday as the Prime Minister and Chancellor intervened to try to boost flagging production.

Gordon Brown and Alistair Darling took the unprecedented step of making a direct appeal to oil industry leaders to increase output and accelerate developments. They took members of Oil and Gas UK, the industry trade body, by surprise by asking to join what was planned as a routine meeting of the organisation near Aberdeen yesterday.

They held out the prospect of regulatory and tax changes to attract more North Sea investment and provide the incentives to develop new discoveries which are little more than 'puddles' compared with the giant Brent and Forties fields. Malcolm Webb, chief executive of Oil & Gas UK, said the proposals "could have a significant impact on the near-term production".

Yesterday's tax change represented little more than tweaking. John Hutton, Business Secretary, announced an easing of Petroleum Revenue Tax rules to allow new fields to be carved out of the unprofitable parts of some existing discoveries. The changes will affect around 30 fields but only add 20,000 barrels a day or 1m tonnes a year to production.

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http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/29/cnoil129.xml