North Sea oil firm Deo Petroleum said yesterday an extension to small field allowances delivered by Wednesday’s Budget would save it about £25million in taxes.
The independent welcomed the overall package of measures for companies operating in the UK Continental Shelf.
It said: “The changes designed to increase investment and production in the North Sea are anticipated to directly impact Deo, in particular the new small field allowance against the current supplementary charge rate of 32%.”
David Marshall, the firm’s chief executive, added: “This is more encouraging news from the HM Treasury that will directly affect Deo and is an encouraging demonstration of the (UK) Government’s commitment to attracting oil and gas investment in the North Sea.”
Deo estimates recoverable resources in its Perth field first phase will now be below the the Treasury’s new and increased minimum threshold of around 45million barrels of oil equivalent.
The firm expects to benefit from the full amount of its 52.03% share of the increased field allowance of £150million.
Deo said: “This will reduce Deo’s tax payable by approximately £25million over the life of the field, improving project economics.”