{"id":349518,"date":"2011-03-30T10:33:14","date_gmt":"2011-03-30T10:33:14","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/03\/30\/oil-firms-to-halt-north-sea-plans\/"},"modified":"2011-03-30T10:33:14","modified_gmt":"2011-03-30T10:33:14","slug":"oil-firms-to-halt-north-sea-plans","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/03\/30\/oil-firms-to-halt-north-sea-plans\/","title":{"rendered":"Oil firms to halt North Sea plans"},"content":{"rendered":"

\n \t\t
\n 30 March 2011<\/span>
\nLast updated at <\/span>06:33 ET<\/span>
\n<\/span><\/p>\n

Two more major oil and gas companies are considering shelving investment projects in the North Sea in the wake of last week’s tax hike.<\/p>\n

Scottish Gas-owner Centrica is understood to be reviewing its current and future developments. <\/p>\n

Valiant Petroleum also said it has cancelled a project worth up to \u00a393m.<\/p>\n

It comes after Norwegian company Statoil said on Tuesday that it has halted development of two new oil and gas fields worth up to \u00a310bn.<\/p>\n

The Mariner field – being developed with Nautical Petroleum and Italy’s ENI – and the Bressay field – owned jointly with Royal Dutch Shell – have combined reserves of 640 million barrels of oil.<\/p>\n

“The proposed tax change in the UK significantly impacts the economics of these projects,” said Statoil spokesman Baard Glad Pedersen.<\/p>\n

\n\tContinue reading the main story<\/a>\t<\/p>\n

\u201cStart Quote<\/span><\/h2>\n
\n

[The tax hike] was plucked out of thin air at the last minute to try and get the government off the hook\u201d<\/p>\n<\/blockquote>\n

End Quote<\/span>
\n\tDame Anne Begg<\/span>
\n\tLabour MP for Aberdeen South<\/span><\/p><\/div>\n

“These are challenging projects, that are more marginal economically, so we need to evaluate how this tax increase impacts them and consider how to move forward from this.”<\/p>\n

Aberdeen rebels<\/span><\/p>\n

Meanwhile two Scottish Liberal Democrat MPs rebelled against the coalition government’s North Sea tax hike when it came up for a vote in the Commons on Tuesday night.<\/p>\n

Malcolm Bruce and Sir Robert Smith – both of whom represent constituencies in Aberdeenshire, which hosts much of the Scottish North Sea oil industry – voted against the measure.<\/p>\n

“It’s easy to look at the bottom line and say that they can afford [the tax],” said Mr Bruce, speaking to BBC Radio Scotland.<\/p>\n

“What is not acceptable is the sudden and abrupt change,” he added, claiming the government had broken a promise not to change the tax regime it made to one firm when it decided to invest in the North Sea.<\/p>\n

But the government is “sitting down with oil companies on a field-by-field basis” to ensure that economically marginal investments are not pulled as a result of the tax decision, according to Scottish Conservative MP Mark Menzies.<\/p>\n

The government won the vote by 334 to 13, with most Labour MPs abstaining, and only the Scottish National Party voting against as a bloc.<\/p>\n

The SNP had no problem with oil and gas paying its proper share, according to MP Eilidh Whiteford, but the government needs to make sure it is not disincentivising companies that are sometimes making a risky investment decision.<\/p>\n

Two Labour MPs, Anne Begg and Frank Doran – also from Aberdeen – opposed the measure.<\/p>\n

Ms Begg accused the coalition government of having “plucked [the tax hike] out of thin air at the last minute” and said the consequences on the less profitable gas industry had not been thought through.<\/p>\n

‘Rethink’<\/span><\/p>\n

Malcolm Webb, head of the trade body Oil and Gas UK, called for emergency meetings over the \u00a32bn windfall tax on the North Sea oil industry, announced in the Chancellor’s Budget last week.<\/p>\n

The industry has claimed tens of thousands of jobs in the UK could go.<\/p>\n

\n\tContinue reading the main story<\/a>\t<\/p>\n

\u201cStart Quote<\/span><\/h2>\n
\n

The lost trust will take a very long time to rebuild\u201d<\/p>\n<\/blockquote>\n

End Quote<\/span>
\n\tMalcolm Webb<\/span>
\n\tOil and Gas UK chief executive<\/span><\/p><\/div>\n

Graham Stewart, chief executive of Aberdeen-based Faroe Petroleum, said the rise would have an impact.<\/p>\n

“We’re active in Norway, which is known as quite a high tax environment, but they encourage exploration by giving companies tax rebates the year after they’ve incurred their costs,” he said.<\/p>\n

“The UK’s doing quite the opposite, it’s making it more difficult for exploration companies.<\/p>\n

Surging oil prices<\/span><\/p>\n

Oil and Gas UK wants to discuss the move with the Treasury and with the government-industry forum, Pilot.<\/p>\n

The industry body said the Budget looked like it was constructed hurriedly, without assessing the damage to investor confidence.<\/p>\n

Chief executive Malcolm Webb said: “The move has made companies rethink their plans to step up investment in the next few years, jeopardising tens of thousands of jobs as well as indigenous oil and gas production which will likely lead to an increase in the import of these fuels.<\/p>\n

“The lost trust will take a very long time to rebuild. Meanwhile, the industry has called an emergency meeting of Pilot, the government-industry forum established to help maximise recovery from the UK continental shelf, and also with the Treasury.”<\/p>\n<\/p><\/div>\n<\/p>\n

Read the original post:
\nOil firms to halt North Sea plans<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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