Double boost for UK off shore oil and gas industry
Ministers hope a new round of licenses for offshore oil and gas exploration will give the country's industry a much needed shot in the arm.
As well as the 26th round of licenses the Government has also announced a £160m worth of tax relief for gas fields in the West of Shetland.
The new round of offshore licensing was announced by Lord Hunt the energy and climate change minister last night (January 27).
For the first time since 1998, this round also offers blocks in all areas of the UK’s seas for new licensing.
The blocks offered include a number relinquished under the Government and industry’s ‘Fallow Initiative’, which stimulates activity on blocks where there had been no significant activity for three years.
Lord Hunt said: “This record-breaking 26th Round includes areas of the continental shelf not as yet explored, and will provide a new boost to activity in the basin.
“The round will help to secure the future of the UK’s oil and gas industry which still provides three quarters of our energy needs and some 350,000 jobs.”
The tax relief follows ‘extensive discussions with industry’ and sees the Government introducing secondary legislation aimed at encouraging the development of remote gas fields in the West of Shetland region.
The region is harder to mine and the tax breaks aim to encourage business to exploit the natural potential there.
Chancellor, Alistair Darling said: “The Government recognises the importance of the UK oil and gas industry to our economy and the dependable foundation it provides for the UK’s energy security.
“We must ensure that the UK taxpayer receives a fair return from the extraction of our national resources and we are committed to maximising the economic exploitation of the UK’s reserves.”
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