Business - Oil industry in line for tax bonus
Chancellor Gordon Brown is considering ‘targeted’ tax breaks for offshore oil companies after threatening the industry with a review designed to increase revenue.
Financial secretary Dawn Primarolo will look ‘at the case for fiscal measures which would provide well-targeted incentives for companies to invest in the North Sea’.
The prospective U-turn follows evidence of massive cuts in oil company exploration and development programmes following the collapse of oil prices.
The study was revealed at the launch of an all-party offshore oil and gas pressure group, supported by 70 MPs.
Chairman Bob Blizzard said: ‘It is great to see the government and industry sitting down together.’
Mark Hope, vice-president of the United Kingdom Offshore Oil Association and technical director of Enterprise Oil, said: ‘We are working with the Treasury and others to see to what extent changes in fiscal arrangements can enhance the UK’s position in the competition for investment.’
The Treasury said it was ‘far too early’ to say if the study would result in firm proposals for tax breaks.