Exploration and appraisal activity in the North Sea doubled in the opening three months of the year following the UK Chancellor’s industry tax cut, new figures reveal.
Data published by the Department for Energy and Climate Change (DECC) shows that there was drilling on 10 new wells between 1 January and the end of March, compared to just five in 1Q 2014.
The jump in activity provides a boost for a sector battling a low oil price and high costs. However, just two of the 10 wells were new exploration wells – an area that is still running at historically low levels.
Ritchie Whyte, a partner at law firm Aberdein Considine, said: “Exploration generally remains a worry – although there appears to now be an acknowledgment within the Treasury that taxation levels are an issue.”
Tax rates were slashed by the Chancellor in an attempt to save the industry from the “pressing danger” posed by low oil prices.