UK industry urges more incentives to boost NSea oil

LONDON (Reuters) - The UK oil and gas industry on Wednesday called for more incentives to help extend the life of oil and gas production in the North Sea and said tax changes in UK annual budget were not enough.

The changes announced in Wednesday's budget cover the treatment of decommissioning costs of oil and gas installations in the North Sea and also include measures relating to the UK's petroleum revenue tax regime.

"They will provide greater certainty and consistency for investors on the UK continental shelf," said Malcolm Webb, Oil & Gas UK's chief executive.

But Oil & Gas UK, that represents the UK offshore oil and gas industry, said the government needs to do more to ensure North Sea oil and gas production can be fully exploited.

"Although the changes announced today are a step in the right direction...the future of the North Sea can only be properly secured by simplifying and reducing the overall tax burden to ensure investment can be sustained," said Mike Tholen, Oil & Gas UK's economics director.

He pointed to a 1 billion pound ($2.01 billion) drop in investment in 2007 in the North Sea as a reason why the UK Treasury and the industry must address the issue of the 50 to 75 percent tax rate on new projects. (Reporting by Jane Merriman)