While the UK government is likely to implement changes to the fiscal regime governing North Sea oil that will reduce the tax burden, the outlook for the country's shale sector is less favorable to the industry, according to research and consulting firm GlobalData. The company's latest report, United Kingdom Upstream Fiscal and Regulatory Report, said Chancellor George Osborne will introduce new tax breaks for the oil industry in the new budget, and the government may be able to legislate for such changes before the May 7 general election. In contrast, the investment climate for shale gas exploration and development is worsening. Will Scargill, GlobalData's upstream fiscal analyst, says barring a significant recovery in oil prices, it is also likely that the next government will move to further improve the UK fiscal regime's attractiveness, but the extent of such moves will ultimately depend on the make-up of that government.
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