UK North Sea tax break plan to boost investment by $9.9 billion: BG Group

LONDON Thu Mar 20, 2014 8:48pm EDT

Chairman of the BG Group Andrew Gould speaks during the Oil & Money conference in London October 1, 2013. REUTERS/Luke MacGregor

Chairman of the BG Group Andrew Gould speaks during the Oil & Money conference in London October 1, 2013.

Credit: Reuters/Luke MacGregor

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LONDON (Reuters) - Oil and gas producer BG Group (BG.L) said new British tax breaks for ultra-high-pressure high-temperature (HPHT) projects in the North Sea could lead to 6 billion pounds ($9.9 billion) worth of investment.

The company said in a joint statement with Denmark's Maersk Oil on Friday that proposals outlined by finance minister George Osborne would support its Jackdaw gas discovery being developed which would make a significant contribution to UK gas supply.

"The gas produced from these new fields could provide 10 per cent of the UK's gas demand when operating at peak rate," said Andy Samuel, managing director of BG Group's European upstream business.

Jakob Thomasen, the CEO of Maersk Oil, a unit of A.P. Moeller-Maersk (MAERSKb.CO), had already welcomed Osborne's proposals on Thursday.

The two companies estimate the projects will create more than 700 new jobs and close to 8,000 additional positions along the supply chain, to be spread across Britain, with half of them likely to be based in Scotland.

Separately Samuel said an independent Scotland would face additional costs for decommissioning North Sea infrastructure if it were to separate from the United Kingdom after a referendum in September.

"An independent Scotland would have to invest around 3,800 pounds per head - over ten times more than when costs are spread across the UK - to match the 20 billion pounds the UK Government has committed towards decommissioning in the North Sea," he said.

Several business leaders have raised concerns in recent weeks about Scotland leaving the United Kingdom after more than three centuries of union with England, fearing uncertainties over currency, tax, regulation and membership of the European Union.

Scottish nationalists have dismissed such fears as scaremongering.

($1 = 0.6057 British Pounds)

(Refiles to remove extraneous word from headline)

(Reporting by Li-mei Hoang; Editing by Anthony Barker)


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