It’s good news for North Sea oil after it receives a boost from new investment. The welcome boost comes as new tax breaks along with over 160 new production licenses bring a renewed interest in investment. The tax breaks, announced last month by Chancellor George Osborne, have already secured two new major North Sea oil deals, including a £1.6 billion project by Canadian oil company Talisman Energy.
It was hoped the tax breaks, announced in September, would encourage more investment into the declining North Sea oil and gas fields and the initial figures are promising. So far this year 46 wells have been drilled in the North Sea region, up 28% on the same period last year and UK oil and gas deals have risen 5% on 2011. The latest deals by Talisman and a multibillion deal by Shell are the first signs that the tax allowance for mature oil fields is proving successful.
As the bedrock of the UK economy Energy Minister John Hayes has said we must be committed to ‘prolonging the life of North Sea oil’, which supports around 440,000 jobs and contributes over £11 billion in tax revenues.