UPDATE:UK Treasury Cuts 2009 Oil Tax Revenue Forecast,Consulting Indus
LONDON -(Dow Jones)- A U.K. Treasury Monday cut forecasts for revenue received from a controversial North Sea oil output tax for 2009-10 as prices and production but said it was consulting the industry to incentivize investment.
The U.K.'s Treasury pre-budget report for 2008 mentions a "downward revision in North Sea revenues in 2009-10 since the Budget to GBP1.1 billion," despite a drop of oil and gas prices being less steep in U.K. pounds than U.S. dollars.
The downgrade is largely the result of lower oil and gas prices, exemptions for costs and lower production.
Overall production fell by 2.5% in 2007, a slower decline than the previous three years.
"Output in 2008 has also been constrained by temporary factors, including the brief closure of the Forties pipeline," the report said. It added "output is expected to continue to fall over the forecast horizon."
In his pre-budget speech to parliament, Chancellor of the Exchequer Alistair Darling said: "I am consulting closely with the industry over how together we can put in place the right incentives to increase production from marginal oil fields."
But critics of the tax rate, which was raised by 10 percentage points to 50% in 2006, said the drop in output and revenue was proof it was counterproductive.
Julian Small, an energy tax partner at consultancy Deloitte, said "when tax rates went up, they made certain fields less attractive."
"Their impact was cushioned by high oil prices but the situation is now reversed because of lower oil prices and people will see (North Sea) investment as less attractive" partly because of taxes, he said.
However, the pre-budget report said that "North Sea revenues in 2008-09 are expected to be GBP3.3 billion above the Budget 2008 forecast, reflecting the rapid rise in both oil and gas prices up to July."
-By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@dowjones.com
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(END) Dow Jones Newswires
November 24, 2008 13:19 ET (18:19 GMT)
Publié le 24 novembre 2008 Copyright © 2008 Dowjones
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