The government is looking to tap into the potential of dormant oil fields by luring companies with the prospect of attractive tax reliefs.

Gordon Brown and Alistair Darling announced that those carving out new oil and gas fields out of unprofitable parts of 30 sites would escape the demands of the Petroleum Revenue Tax.

The under fire duo went on a charm offensive this week at a meeting of Oil & Gas UK, where they said want to do more to increase production. Brown said: 'We are providing incentives not only for existing fields but for new fields. But this is not just a national problem, it's a global problem.'

Fields liable to PRT currently cost their owners 50% on the net income they rake in after extracting oil and gas from UK fields or a designated area.

The government is also making changes to the licensing structure for North Sea oil fields and there are a number of extra hoops that oil companies will have to jump through in order to qualify, the Department for Business Enterprise and Regulatory Reform said.

'It will be up to licensees to make a case for a change of field determination on economic grounds,' said DBERR. 'This would then be scrutinised by BERR, Treasury and HMRC officials to ensure there was a genuine case for change and that it satisfied economic, geological and wider fiscal requirements; it would then need to be approved by both BERR and Treasury Ministers.'

Further reading:

Oil and gas companies get tax concessions