Oil and gas industry fighting for survival, MP warns

A gas rig on the east coast near Great Yarmouth, NorfolkPicture: Steve Parsons Copy: For : EDP FileE

A gas rig on the east coast near Great Yarmouth, NorfolkPicture: Steve Parsons Copy: For : EDP FileEDP pics © 2003 Tel: (01603) 772434 - Credit: EDP © 2003

The oil and gas industry is fighting for its very existence on the UK continental shelf with thousands of livelihoods on the line, Waveney MP Peter Aldous has warned making a radical plea for tax cuts.

Waveney MP Peter Aldous.February 2014.Picture: James Bass

Waveney MP Peter Aldous.February 2014.Picture: James Bass - Credit: Eastern Daily Press © 2014

The chairman of the all-party group on offshore oil and gas in Westminster told MPs the supplementary charge and the petroleum revenue tax should be reduced further or abolished, with more funding for seismic surveys provided.

Last year's budget saw the petroleum revenue tax (PRT) cut from 50pc to 35pc to support continued production in older fields, with the existing supplementary charge for oil companies also be cut from 30pc to 20pc.

The MP, whose constituency includes the major energy port of Lowestoft, described to MPs how some 75,000 jobs had gone in the past 15 months as a result of the dramatic collapse in oil prices.

He said energy security was a number one priority and maximising the production of oil and gas at home would reduce the dependence on imports. He said that there were known reserves of 20 billion barrels of oil and gas to be recovered from our offshore waters, and gas had a key role to play.

He called for the budget measures to be looked closely at again and for work to be started on regional plans, including in the southern North Sea.

'Although the North Sea is a mature basin in many respects, we are embarking on a final chapter of oil and gas recovery there, which is, in many ways, a new venture, built on a cornerstone of co-operation, collaboration and consolidation,' he added. 'In the past, innovating, investing in technology and reducing costs have been done by the big oil companies. I suggest that we look at what has happened with the catapult industry of offshore wind, in which the government has led the way.'

Most Read

He urged the government to 'get on with it', telling MPs: 'Time is of the essence.'

Do you have a story about the energy industry? Email business editor mark.shields@archant.co.uk

Comment – Page 30