Oil and gas leaders will on Wednesday make a last-ditch effort to persuade the Government to abandon a £10bn tax grab on North Sea energy companies, amid warnings the levy will "utterly destroy" the industry.Chief executives are expected to tell the energy select committee that the tax will close down fields early and mean the majors find it difficult to sell older fields to new owners.
Meanwhile, Chris Huhne, the Energy Secretary, will have to defend the impact the tax is likely to have on oil and gas production at a time when Britain needs to bolster its energy security.
The hearing comes three days after Centrica warned it may partially shut the UK's biggest gas field as a result of the tax. The move has recently been criticised by John Whiting, head of the Office for Tax Simplification, Ed Balls, the Shadow Chancellor, and numerous industry figures.
On Tuesday, Bill Transier, chief executive of Endeavour International, a major investor in the North Sea, said British governments had made doing business in the UK "more of a political risk than West Africa or the Middle East", after making four major tax changes within seven years.
"The North Sea is the second-largest oil-producing region in the world after Saudi Arabia. It's a national treasure for the UK. The government is utterly destroying that," he told The Daily Telegraph. "I wish people would step up and say you just can't do this. You're killing the industry. Capital is leaving the country and going elsewhere. The politicians seem to be ignorant of the facts and then they do something stupid as a political mechanism to offset a fuel tax. It's a critical time in the future of the North Sea and some of these reserves are going to be lost forever. They need to eat some humble pie and say they made a mistake." (read more)
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