EnCore Oil ..

UK's Brown exempts redeveloped North Sea fields from PRT UPDATE

(Adds details, comment from North Sea operators, background)
LONDON (AFX) - The UK government has exempted abandoned North Sea gas fields which have undergone redevelopment and became productive again from the petroleum revenue tax.
In his pre-budget report, Chancellor Gordon Brown said: 'The government today announces the removal of fields from the charge to petroleum revenue tax if they are redeveloped following full decommissioning.'
The new ruling -- which will take effect in July next year -- was reached after a series of discussions with North Sea producers on issues affecting the 'stability' of the North Sea tax regime, he said.
The PRT was abolished in 1993. However, fields that were developed and started production prior to that year continue to pay the tax.
Oil companies operating in the North Sea, including supermajors BP PLC (LSE: BP.L - news) , Royal Dutch Shell PLC (LSE: RDSB.L - news) and BG Group PLC (LSE: BG.L - news) , have been heavily taxed over the years by the government which has been trying to share in the windfall from the energy price boom.
The UK Offshore Operators Association, which unites the companies operating in the North Sea, welcomed the government's move.
A UKOOA spokeswoman called the decision 'very sensible' as it will help encourage companies to invest in old fields with still untapped resources.
The UKOOA believes the entire North Sea still holds between 16 and 26 bln barrels of reserves, with the size of the volumes that could be recovered from the UK Continental Shelf entirely depending on the size of the investments that it could attract.
'It is crucial that we get the business and fiscal regulatory environment right (in order) to attract more investments,' said the spokeswoman.
The North Sea has already absorbed over 330 bln stg in investments since the first gas was discovered there in the 1960s.
The UKOOA thinks the same amount of investments will be needed to maximise the resource potential of the gas-rich North Sea.
monicca.egoy@afxnews.com
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