Investment in North Sea oil is the highest it has been in three decades, according to a national trade association for the industry.
Reporting that investment hit £11.4bn last year, Oil and Gas UK, said that levels are still on the increase.
The trade body, comprising over 320 firms with concerns in the North Sea, said that 2013 levels will reach £13bn. The body has credited the rise to the introduction of tax relief.
The chief executive of the body, Malcolm Webb, said:
“The recent introduction of targeted tax allowances to promote the development of a range of difficult projects, coupled with the government’s ground-breaking commitment to provide certainty on decommissioning tax relief, has prompted global companies and independent businesses alike to take another look at the UK as an investment destination,”
The measure provides exemptions of 32% levied on the first £500m generated on shallow field projects.
To exploit the measure, many firms have also reworked their own commercial finance strategies. Working with a factoring broker has helped many for example, allowing them to maximise their assets in a more flexible way than previous operations allowed.
The trade body said that still greater flexibility was needed, as the year’s production actually fell. With levels of exploration increasing though, Webb said the industry still had much encouragement for the future.
Over the next three years, it is expected that 130 new exploration wells will be seen. Holyrood has also said there are 24 billion oil barrels still to be recovered across the North Sea fields.