The oil and gas industry welcomed a move by the chancellor which could lead to the development of eight new North Sea fields and the recovery of 300million barrels from them.
Mr Darling also said the UK Government would work with industry to look at how best to ensure oil and gas pipelines and other infrastructure were developed west of Shetland.
Malcolm Webb, chief executive of industry body Oil & Gas UK, said: “Since the Budget earlier this year, we have worked closely with Treasury to demonstrate that the relaxation of rules around eligibility of high pressure high temperature (HPHT) projects for the new field allowance would promote their development without affecting current tax revenues.
“HPHT fields are some of the most technically demanding and commercially difficult in the UK continental shelf.
“We therefore welcome the announcement that there has been a first relaxation of the rules targeted at an additional eight HPHT fields and look forward to this measure bolstering investment in these challenging projects.
“As the country emerges from recession, it will be necessary for the government to consider more profound changes to the tax regime which reflect the high cost and increasingly mature nature of the basin.
“These measures are needed to restore competitiveness and attract investment to maximise oil and gas recovery and ensure a sustainable future for this industry.”
Mr Webb was also encouraged that the chancellor wanted to continue a dialogue with the industry to make sure that infrastructure was developed west of Shetland.
He added: “This infrastructure is essential if the UK is to benefit from the energy security and broader economic benefits of these oil and gas reserves, which represent one-fifth of our future resource.”
West of Shetland is the last major undeveloped area in UK waters and could contain up to 20% of the country’s remaining oil and gas reserves.
Alistair Birnie, chief executive of industry body Subsea UK, said: “Today’s pre-Budget report in relation to the oil and gas industry is very welcome and a step firmly in the right direction. The measures for this industry demonstrate that the government has been listening and is acting to secure the long-term future of the North Sea which will, in turn, safeguard jobs and generate revenue the country urgently needs.”
Derek Leith, head of tax for Ernst & Young in Scotland, said: “As predicted, the pre-Budget report contains further changes to UK oil and gas tax regime – albeit these are more a refinement of the measures announced in the April Budget and contained in Finance Act 2009.
“These changes demonstrate the continuing engagement between industry and HM Treasury on oil and gas fiscal policy, and more importantly that the Treasury is willing to take on board feedback from industry.”
But he added: “It is hard to escape from the conclusion that continuous tinkering with the regime isn’t the best way to secure the maximum exploitation of the UK continental shelf, but on the other hand, with the country’s growing national debt and the differing priorities amongst some of the oil and gas companies themselves a fundamental redesign of the fiscal regime was never on the cards.”
Martin Findlay, head of oil and gas tax for KPMG in Aberdeen, said: “With the bleak economic outlook, the concern remains that the industry will be raided in the future to balance the country’s books.”
Andrew Ogram, tax partner at Deloitte in Aberdeen, said that, with North Sea exploration in decline, the industry had been hoping for bold new measures to kick-start drilling.
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