Treasury offshore move welcomed by Oil and Gas UK

The oil and gas industry has welcomed a Treasury change to offshore allowances as "a step in the right direction".

It had earlier been claimed a Budget tax rise for North Sea oil production could cost thousands of jobs.

Oil and Gas UK said the new concession - worth about £50m - could help some smaller companies develop the more marginal offshore reserves.

However, chief executive Malcolm Webb said "much more action" was needed to restore industry confidence.

He added: "This has to be seen as an encouraging first sign of some real progress."

The Treasury announced that it would provide additional support for investment in the North Sea through an extension of the ring fence expenditure supplement (RFES) aimed at helping producers operating in marginal fields.

Economic Secretary Justine Greening said: "The government was clear at the Budget that it would engage with oil and gas companies, including to consider the case for further support for marginal projects.

"Today's change demonstrates our commitment to ensure current allowances work effectively and equitably, and lays the groundwork for further constructive discussions on field allowances."