BP puts tax anger aside to invest £3bn in North Sea

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BP is spending £3bn to redevelop two North Sea oilfields, despite the large tax increases outlined in the Budget.

The investment in the fields at Schiehallion and Loyal, to the west of the Shetland Islands, will give access to the 450 million barrels of oil left in the area – enough to ensure production to 2035, the company said yesterday.

The North Sea oil and gas industry had expressed outrage at surprise tax changes announced by the Chancellor in March, which saw a sharp increase in taxes when oil proces are high.

BP said yesterday the tax rises had cut the value of the fields, and had been taken into account when deciding whether to go ahead.