THE UK’s LARGEST gas field will remain shut because of chancellor George Osborne’s windfall tax on North Sea profits.
Centrica, the owners of British Gas, said it will not reopen its Morecambe South field after four weeks of planned maintenance. This is because the higher tax rate announced by Osborne in the Budget had rendered it uncommercial.
The windfall tax was put on production profits to at least 62% and up to 81% on older fields when oil prices are more than $75 per barrel.
But companies have claimed this unfairly penalises gas fields because gas is lower in price than oil. This means that old fields are uncommercial, they say.
A Centrica spokesman said: “We welcome the ongoing dialogue government is having with industry around the damaging impact the increased tax levels has on North Sea gas security and investment.
“However, the increase in supplementary corporation tax means the south field is now taxed at 81%. At this level of tax, profitability of Morecambe South field can be marginal and so we expect this field to operate on a more intermittent basis in future.”
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