North Sea oil and gas industry is forecast to generate £1bn for the treasury this year
Oil and gas production levels in the North Sea region have been forecast to contribute nearly £1bn in tax this financial year as the industry sees a significant transformation due to a rapid increase in oil prices.
Brent crude oil prices have recovered to a level as high as $71 a barrel in January, a figure that hasn’t been achieved since the downturn in oil prices back in 2014.
Data from HM Revenue and Customs suggests that in the first three quarters of 2017/18 fiscal year, North Sea oil production generated £814 million in tax. Oil and Gas UK, the trade body for the UK has forecasted over £1bn for the Treasury over the complete tax year, assuming profits will follow current trends.
This figure is significant for the North Sea industry and a massive change from the previous year when the industry didn’t generate any tax revenues at all.
Oil and Gas UK have states that nearly £330 billion has been paid in production taxes since the early 1970s. Oil and Gas UK believe there are approximately 20 billion barrels of oil and gas remaining untapped within the UK Continental Shelf in the North Sea. Confidence in the north sea oil industry has somewhat improved with some of the leading oil businesses showing further interest and commitment to the north sea region since oil prices have increased.
In the last week, BP announced two new oil and gas discoveries within the North Sea and intends to double its production in the region to nearly 200,000 barrels daily within the next two years. Shell has also pledged to increase its investment into the region with a focus on redeveloping its Penguins oil and gas fields.
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