The slump in North Sea exploration has coincided with a series of tax grabs by George Osborne.
The chancellor stunned the producers in 2011 with his now infamous £10billion tax raid.
The move – which merely funded a 1p cut in petrol prices – led to an angry backlash from the industry. But since then Mr Osborne has tried to restore confidence with new field allowances and contracts guaranteeing tax breaks for decommissioning North Sea assets.
But in his Budget in March – with a warning that the basin faces an “exploration crisis” – he launched a fresh raid on the offshore sector.
Today he faces mounting pressure over his decision to slap an extra tax on rigs and flotels coming into the North Sea to carry out work – a practice known as bareboat chartering.
The Treasury says it will cost the sector in the region of £175million per annum – but industry insiders say it could cost up to £1billion in total.
Bosses fear the new tax will drive rigs away at a time they are needed more than ever.
However, he tempered the bad news with a new allowance for the region’s most challenging high pressure, high temperature (HPHT) fields.
Under the scheme, which is designed to encourage big development projects and exploration across the central North Sea, for every £1billion a company spends on such projects it will get at least £200million in tax relief.