Following Chancellor George Osborne's Autumn Statement and Spending Review, Mike Tholen, Oil & Gas UK's economics director, commented:
'Since the last Budget, the oil price has declined further, and we must continue to do as much as we can to help boost confidence and encourage investment in the UK Continental Shelf. If the oil price continues to be lower for longer, there is little doubt that alongside industry's own concerted effort to improve its efficiency, we will need to work with Treasury on additional measures, including revisiting the current headline tax rate - consistent with the government's commitment to the sector's tax rate falling over time.
'There is still much to play for in the UK's North Sea - in terms of both barrels of oil and gas for the country, highly skilled jobs, and the security that comes with an indigenous energy supply. The Office for Budget Responsibility (OBR) figures referenced in the Chancellors speech - noting a dramatic decline in tax receipts - underscore the severity of the challenge ahead for the sector, but fail to take into account the indirect contribution this industry makes as a major employer, innovator and exporter of goods and services at home and abroad. In addition, Oil & Gas UK believes there is room for greater optimism, given the fact that production from the industry is likely to increase this year - for the first time in more than a decade - and is set to continue throughout the remainder of this decade.