North Sea tax warning

The Government should leave the North Sea tax regime alone or risk losing billions of dollars in investment to the Caspian region, top industry figures warned on Tuesday night. Heinz Rothermund, the managing director of Shell UK Exploration and Production, stressed that a stable tax system would be essential to prevent a flight of investment […]

The Government should leave the North Sea tax regime alone or risk losing billions of dollars in investment to the Caspian region, top industry figures warned on Tuesday night.

Heinz Rothermund, the managing director of Shell UK Exploration and Production, stressed that a stable tax system would be essential to prevent a flight of investment to emerging oil provinces such as the Caspian area and Brazil.

`Fiscal stability is an important factor in maintaining jobs and the development and continuation of a world-class industry,’ he said.

North Sea operators and contractors have been campaigning hard for no changes since chancellor Gordon Brown announced a review of the present tax regime to ensure the country was receiving an appropriate share of the take.

Speaking at a conference organised by the UK Offshore Operators’ Association, of which he is also president, Rothermund said oil companies wanted to work with Government to enable the industry to continue delivering `significant benefits’ to the country.

The deep-water and other technologies developed in the North Sea over the past few years are seen as a potentially huge future export earner that could be jeopardised by any tax changes.

The offshore industry has been intensifying its lobbying before the green paper expected next week.