Oil firms meet with Huhne

Steve Dinneen
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OIL firms represented by Oil & Gas UK held crunch talks with the government yesterday over George Osborne’s controversial oil profit tax raid.

Sources close to the talks told City A.M. they were “not hugely successful”, despite energy secretary Chris Huhne saying elements of the proposals “were up for consultation”.

Oil & Gas UK will now meet George Osborne to present its case directly.

The body’s chief executive Malcolm Webb said: “Industry representatives today had a full and frank discussion.

“The meeting recognised the concerns arising out of the new measures in the Budget for gas fields, new field developments, decommissioning, mature fields, infrastructure and the supply chain.”

The industry will publish a survey outlining the impact of the tax increase in April that will be considered by the government.

Labour attempted to capitalise on the anger over the tax, with shadow treasury minister Kerry McCarthy saying: “The Conservative-led government’s claim to be providing tax predictability and stability has a hollow ring for businesses investing in the North Sea.”

Oil firms including Centrica, Valiant, Statoil and Total have all threatened to shelve lucrative projects in the North Sea in protest at the chancellor’s surprise hike in the North Sea supplementary charge from 20 to 32 per cent.

Chris Huhne said: “We’re listening to [concerns]. We want to understand it more carefully with detailed figures.”