Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Oil industry “may require further tax cut” says OGUK chief

Oil and Gas UK chief executive Deirdre Michie
Oil and Gas UK chief executive Deirdre Michie

The North Sea oil sector may need a further reduction in its tax bill if prices remain low, the head of an industry body has said.

The UK Government acted earlier this year to cut the supplementary charge paid by the industry, which has come under pressure as a result of the decline in oil prices.

Deirdre Michie, the chief executive of Oil and Gas UK, said more action could be required if prices fail to rise.

She insisted the sector had “turned a corner”, despite cautioning that the “challenging times we face are set to continue for a while”.

But she stressed: “If the oil price continues to be lower for longer we will need to work with the Treasury to see what other measures may be required, including revising the headline tax rate, which would be consistent with the Government’s fiscal strategy of tax rates falling over time.”

Some 45 billion barrels of oil and gas have been extracted from the North Sea in the last 50 years – enough to fill almost three million Olympic-sized swimming pools, Ms Michie said.

Addressing a fringe event at the SNP conference in Aberdeen, she said extracting “our indigenous oil and gas reaps huge economic and lifestyle benefits for the country and avoids, if you think about it, expensive and less environmentally friendly imports”.

She also said the sector could be “confident the demand for our product and services will continue”, saying oil and gas makes up 70% of the UK’s primary energy need.

Ms Michie accepted the North Sea is facing “difficult times” with operators in the UK continental shelf spending more on operations last year than they earned from production, with this “exacerbated by the sharp and ongoing fall in the oil price”.

She added: “We expect capital expenditure to fall from a record high of £14.7 billion, to fall by about £2 to £3 billion over the next two to three years.

“So there’s therefore real concern about the gap in terms of projects in the pipeline as well as the current lack of exploration.”

She spoke about the “need to overcome the current challenging operating environment”, and added: “We do consider a corner is being turned, the concerted action of companies is beginning to yield results that will help to restore the attractiveness of the basin.

“We completely understand these challenging times we face are set to continue for a while, but the direction of travel we’re on is the right one and we need to stay focused.”

Recommended for you

More from Energy Voice

Latest Posts