Exploration and appraisal activity in the North Sea doubled in the opening three months of the year following the Chancellor’s industry tax cut, new figures reveal.
Data published by the Department for Energy and Climate Change (DECC) shows that work was carried out on ten new wells between 1 January and the end of March, compared to just five in the first quarter of 2014.
The jump in activity provides a boost for a sector battling a low oil price and high costs, and appears to have been triggered by George Osborne’s recent tax cut. However, just two of the ten wells were new exploration – an area that is still running at historically low levels.
Ritchie Whyte, a partner at law firm Aberdein Considine, said: “Exploration generally remains a worry – although there appears to now be an acknowledgment within the Treasury that taxation levels are an issue.”
Tax rates were slashed by the Chancellor in an attempt to save the industry from the “pressing danger” posed by low oil prices.