UK Oil Industry Confidence Increases Despite Tax Increases
PRLog (Press Release) - Aug 26, 2011 - The outlook of firms drilling oil in Britain has improved in the second quarter of 2011 from the previous three months, as shown in data produced by Oil & Gas UK on Wednesday. The industry body has commented however that confidence remains fragile in the wake of a tax increase that was announced earlier in March. The £2 billion tax was set to fund a cut in fuel duty following a huge increase in global oil prices.
Oil & Gas UK has said that overall industry confidence increased modestly from 51 to 54 points. The industry confidence index measures a variety of economic indicators and gauges overall industry confidence on a 100-point scale. The Oil and Gas UK ranking shows a dramatically improved corsa outlook whereas a rating below 50 represents a very negative viewpoint.
Confidence in the oil industry (http://www.claxtonengineering.com/) fell by 12 points on a quarterly basis in May following the Chancellor of the Exchequer George Osborne's decision to impose the tax rise. This increased the state's take on oil drilling and gas profits to 32% from 20% overnight.
The government has since announced a concession to North Sea producers by offering some relief for investments in marginal fields.
Ken Cruickshank, Oil & Gas U.K.'s supply chain manager, said that while confidence had improved among the majors, the outlook among independent operators had dropped further. "While it app bmw ears that some companies may feel reassured by the Treasury's willingness to engage on ways to mitigate the negative impact of the tax increase on investment, the confidence of many independent operators in particular continued to decline in the second quarter," said Cruickshank.
The treasury has also said in a statement that it expects offshore drilling company (http://www.claxtonengineering.com/Products/) profits to remain high. However, if the treasury indentifies some potential impact on investment they have said they would consider using allow alfa romeo ances to deal with it. The treasury has also auto part made it clear that consistent communications with the oil industry will take place in relation to setting the level of its fuel stabiliser. In this situation, taxes would fall in order to reflect the cut.
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