Offshore staff
(UK) - ExxonMobil and BP are reviewing their future North Sea investment programs, a sign that overall activity in the area could slump sharply in 2007, reports a local source.
Both companies have confirmed that they will be conducting a review of future exploration programs, citing the UK's recent production tax hike for their decisions.
According to the source, Shell has already made the decision to cut a key tender for future North Sea drilling rigs by a third.
Another company expected to suffer from the recent tax hike is Dana Petroleum, which offsets its high-risk exploration programs with steady production operations in the North Sea.
The UK. Department of Trade and Industry imposed new rules earlier this year to try to reduce the number of inactive or fallow fields, encouraging oil & gas companies to invest or divest.
Updated 12/27/05
Tax doubles for North Sea oil & gas companies
(Europe) - The British government, struggling to erase its deficit, is doubling the surtax for North Sea oil and gas companies, a move that surprised an industry expecting an increase half that size, according to a local source.
The proposed increase in the supplementary tax for North Sea energy companies is for 20% of income from the current 10%, with the change expected to cost the industry the equivalent of $13 billion over the next three years.
The move affects several Canadian energy companies with North Sea assets, including Canadian Natural Resources Ltd., Nexen Inc., Petro-Canada and Talisman Energy Inc.
Most of those companies say the decision will not have a major immediate impact, but that it is unsettling for any government to abruptly rewrite tax laws, and add that companies who recently bought assets will suffer the most, having paid full price.
12/16/05
