Oil industry calls for tax breaks

12/02/2009

Just eight months after oil prices hit a record $147 a barrel, the UK oil industry has met with ministers to plead for tax breaks to prevent a slump in drilling activity and production.

Industry chiefs are leaning on energy secretary Ed Miliband in the hope that tax breaks will help to alleviate the strain of falling profits and decreased investment from the banking sector.

Last year, government officials were calling for a windfall tax to be imposed on energy firms to lessen the burden that soaring crude prices were having on the consumer and commerce.

Many residents also felt the strain of dramatically increased heating oil bills.

Now, with crude trading at $35 a barrel, Oil & Gas UK, the industry association for North Sea operations, is calling for the government to amend taxation laws in a bid to make it easier for small operators to stay financially buoyant.

Malcolm Webb, the association's chief executive, has warned that as many as 20,000 jobs could depend on a stable North Sea drilling industry.