North Sea production slumps after Budget tax hike
North Sea oil production has slowed to its lowest level since records began 15 years ago following the Chancellor's recent tax raid on the industry.
An update from the Department of Energy yesterday showed the biggest fall in oil production since quarterly records started in 1995.
The slowdown follows the Chancellor's controversial Budget decision to increase the supplementary tax on North Sea Oil production to 32 per cent from 20 per cent to pay for a cut in petrol duty.
The Chancellor's decision drew an industry-wide outcry and claims that mature fields would be closed.
But the Government said yesterday the 15.6 per cent fall in first-quarter output from a year earlier was down to maintenance work and production slowdowns at a number of fields, and that production figures for April were expected to return to normal levels after maintenance and infrastructure problems were sorted out.
However, an Oil and Gas UK survey warned on Thursday that a quarter of 240 potential projects in the North Sea were less likely to go ahead after the tax increase.
Gas production fell 17.6 per cent from a year ago.
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