Osborne hints at oil tax cut

CHANCELLOR George Osborne has indicated he may cut taxes in a bid to help the North Sea oil and gas sector in next month’s Budget

Mr Osborne’s comments came as he prepares to meet industry leaders today to discuss the crisis being faced by the industry after big falls in the price of Brent Crude.

It follows a report by industry body Oil and Gas UK that warned of a significant drop-off in exploration, with annual investment by oil firms set to fall by billions of pounds.

Mr Osborne said: “I want the hardworking people whose livelihood depends on the oil and gas industry to know the British Government is standing alongside them and we will do everything we can to help. We’ve already cut taxes and if we need to we will do so again in the Budget.”

Ed Davey, the energy secretary, also pledged to tackle inefficiencies in the

sector in order to “guarantee Britain’s energy security”.

Sir Ian Wood, author of a major report on the industry for the UK Government, warned taxes needed to fall.

He said: “What we are talking about here is an industry which is extraordinarily heavily taxed. The headline rate needs to come down.

“Otherwise, what is going to happen is the operators will just stop investing here.”

Meanwhile, Bermu-da-based drilling firm Archer has said it is to shed more than 400 posts in the UK, with many in Aberdeen.

It has lost 135 posts from its operations in Scotland with another 290 UK onshore and offshore jobs due to be lost in the coming weeks.

The firm revealed the cut-backs in its latest financial results, stating that some customers in the UK and US had chosen to defer projects or to stop drilling.

It added: “As a consequence of the reduction in activity and the demand for our services, the company has decided to reduce employee headcount by approximately 1000 positions.”