UK announces help for North Sea oil industry in budget

18th March 2015, Comments 0 comments

Finance minister George Osborne on Wednesday announced £1.3 billion (1.8 billion euros, $1.9 billion) of support for Britain's North Sea oil industry, hit by falling prices, in his final budget before May's election.

Speaking in the House of Commons, Osborne said the industry faced an uncertain future without immediate action.

The measures announced included a cut in petroleum revenue tax from 50 percent to 35 percent next year and a promise of new seismic surveys in under-explored areas of the North Sea.

He also said the supplementary charge -- which companies pay on their profits -- would be cut from 30 percent to 20 percent, backdated to January.

"It's clear to me that the fall in the oil price poses a possible danger to the future of our North Sea oil industry unless we take bold and immediate action," Osborne said.

His comments came as Brent crude for May delivery fell 45 cents to $53.06 a barrel in London midday deals.

Osborne had faced weeks of pressure from the North Sea oil industry, a major source of income for the Scottish economy, to take action to prop up the industry.

Exploration and production companies operating on the UK continental shelf saw revenues shrink last year to just over £24 billion, the lowest since 1998.

Britain votes on May 7 in a general election in which opinion polls suggest Osborne's Conservatives, led by Prime Minister David Cameron, are virtually neck-and-neck with the main opposition Labour party.

© 2015 AFP

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