Energy chiefs welcome oil and gas tax breaks - but say more could be done
- Credit: PA
Energy chiefs in the region have welcomed plans to support the industry as a step-in-the right direction but continued to press the case for further tax breaks for oil and gas.
George Osborne cut the supplementary charge – an extra tax on oil and gas businesses - by half, from 20pc to 10pc, while also announcing a raft of new contracts for renewables.
He also scrapped the petroleum revenue tax – of 35pc – in a bid to support the industry which is struggling from the high cost of operating North Sea oil and gas fields.
But while East of England Energy Group (EEEGR) chief executive Simon Gray welcomed the cut, he said it did not go as far as he hoped: the total abolition of the supplementary charge.
'We could always do with more help but it's a move in the right direction and we're grateful for any help we can get,' he said.
You may also want to watch:
Mar Goodall, New Anglia LEP board member and chairman of the Oil and Gas Taskforce said there should have been more tax relief for drilling activity – similar to Norway – to maximise oil and gas recovery in the North Sea.
But he added: 'Any steps to reduce the heavy burden of taxation on the oil and gas industry are welcome.
- 1 11 Norfolk cafés perfect for outdoor dining
- 2 Son's plea for help as mum, 87, goes missing from care home
- 3 Man in critical condition after Norwich assault
- 4 Murder investigation launched after woman found dead following house fire
- 5 Thieves swam across river to steal paddleboards from new firm
- 6 Covid Delta variant cases double in Norfolk
- 7 In pictures: England fans enjoy Euro 2020 win at Norwich fan park
- 8 Neighbours tell of shock as murder probe launched
- 9 Weather warning for thunderstorms this week after Monday heat
- 10 Seller took motorbike for one last ride – and did 119mph on NDR
'The cuts announced will help the more mature fields that we have here off the Suffolk and Norfolk coast.'
The chancellor also said there would be £730m in new auctions for subsidies for up to 4GW (gigawatts) of offshore wind and other less-established renewables.
Mr Gray said this would be the equivalent of up to four windfarms similar to the size of £2.5bn East Anglia One.
The new measures comes as the industry is coping with a 'lower for longer' oil price.
It has seen the price fall from its peak of around $110 a barrel in the summer of 2014, down to below $30 earlier this year.
Its current price of about $40 a barrel still means oil platforms in the North Sea are operating at a loss.
And with the gas price tied to oil, gas prices have also been driven down – piling pressure on gas firms in the Southern North Sea.
But the chancellor's new tax measures should ease the burden for struggling operators.
Mr Osborne said: 'In my budget a year ago, I made major reductions to their taxes but the oil price continued to fall so we need to act now for the long term.
'I am today cutting in half the supplementary charge on oil and gas from 20pc to 10pc and I am effectively abolishing petroleum revenue tax too, backing this key Scottish industry and supporting jobs right across the country.'