After the weekend’s credit rating news, chancellor George Osborne needs some good news to cling on to. Which is good, because today, new data revealed that capital spending on oil projects in the North Sea is going to reach its highest level for 30 years in 2013, with companies expected to splash at least £13bn on their operations.
The data comes from Oil & Gas UK, the industry’s main body, and is being touted as the most optimistic data to come from the sector in many years.
Chief executive, Malcolm Webb, put the sudden surge of investment down to the government back peddling on its tax policy on the sector, which has created ‘a new wave’ of major investment. Osborne was planning to raid the oil industry in order to fund tax cuts for many on the lowest wages, but performed an about turn on the issue.
It is worth noting that part of the reason for increased investment is that the remaining oil in the region is increasingly hard to get at, so firms are having to scrape the barrel, as it were, to reach the reserves that they can get at, and it is proving an expensive business.