Energy tax could prevent re-opening of gas field

THE OWNERS OF British Gas have indicated that they may keep part of Britain’s largest gas field closed in response to the windfall tax on North Sea oil and gas producers’ profits, as announced in the Budget.

Centrica announced that two gas fields in Morecambe, northern England, would be closed for a month’s planned maintenance; it added that its older South Morecambe field could stay shut because higher taxes have rendered it uncommercial.

Chancellor George Osborne raised the effective rate of tax on production profits to at least 62% and up to 81% for some older fields.

A spokesman for Centrica said: “UK oil and gas producing fields are now subject to some of the highest levels of tax in the world; our South Morecambe field is now taxed at 81%. Accordingly, we may choose to buy gas for our customers in the wholesale markets in preference to restarting the field after planned maintenance.”

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