High taxes and falling prices will force the UK’s £9bn gas industry to cancel projects and scale back its operations in the North Sea, an industry leader has warned. Mike Simpson, the UK business manager of Tullow Oil, said gas companies dealing with low prices were suffering because they had to pay the same 50% corporation tax rate as oil producers. Simpson revealed that Tullow planned to cancel a production programme in one of its North Sea fields because it had become uneconomic. He said: “There is going to be a crunch in the gas business soon. The door will shut quite dramatically. It has already started – companies are pulling rigs out of the market.” He also warned that failure to ease the tax burden on gas could lead to hundreds of millions of pounds worth of the fuel being left below the North Sea.
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North Sea Gas Under Threat:
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