October 21 2014 Latest news:
Duncan Brodie, business editor
Friday, July 18, 2014
Business leaders in East Anglia are being urged to put pressure on the Government for a change in the tax regime to sustain gas production and exploration in the North Sea.
Simon Gray, chief executive of the East of England Energy Group, which represents firms from across the region’s energy sector, including oil and gas, offshore wind and nuclear, is seeking support from the wider economy, including business organisations and local authorities.
Mr Gray warns that, without a change in the tax regime to encourage further investment, the North Sea gas sector could dwindle, leaving reserves untapped when they could help to power the UK for decades to come.
“I want to rally support for the industry by pointing out the dangers of premature decommissioning of gas fields and removing infrastructure in the Southern North Sea,” he said. “Instead, we need to ensure further exploration and maximise new field developments.”
He is urging all members of EEEGR to reinforce his message to Government, but believes the campaign also requires support from beyond the energy sector.
“I am also asking the New Anglia LEP, chambers of commerce, economic development departments, ports, airports and all stakeholders who benefit from the offshore industry in the region to have their say,” said Mr Gray.
“We must make sure that the voice of the East of England is heard as loud as those in Aberdeen and the North East and to ensure that Government is aware of the particular case and issues we have here in the East of England.”
His call comes in response to The Treasury’s invitation for evidence on the future of the UK oil and gas tax regime and how it should further support the industry as well as ensuring the nation receives a fair share of the profits.
Mr Gray said gas had historically traded at around half the price of oil but faced similar costs and he wanted to the Government to recognise this with a lower tax threshold for gas.
“We would also ask for further stimulation for gas exploration to ensure maximising economic recovery of gas reserves − as the Southern North Sea is a solely gas resource − while existing infrastructure and subsea resources are still in place,” he added.