A tax benefit for North Sea oil companies doesn’t do much because the incentives are “niche and marginal,” a source in the industry said.
UK this year increased the tax burden on North Sea oil and gas production by more than 10 percent. The government this week, however, said it would increase the tax relief on losses for producers from 6 percent to 10 percent.
Norwegian energy company Statoil in response said it would restart work at some of its North Sea fields. A source close to a rival producer, however, said the tax relief wasn’t doing much good.
“This tax change doesn’t do anything for us because we’re not making a loss,” the source told The Daily Telegraph newspaper. “It’s so niche and marginal and would only really affect some smaller exploration and production players, as far as we can see.”
Industry group Oil and Gas U.K. said, however, that the tax relief would help level the playing field in operations in the North Sea.
Germany Energy Company RWE Dea said in June it was investing in two natural gas fields in the North Sea even though London increased taxes for production there.
