Chancellor Philip Hammond has said he will investigate the use of tax incentives to help keep oil and gas fields productive for longer.

The tax breaks would be aimed at making it easier for operators to sell oil and gas fields. A panel of experts will be set up to examine the issue.

Tax Breaks Explained – Why are they needed? 

It was previously thought that oil fields would stay in the hands of the big boys – BP, Shell and the like. But the profits have dropped and the oil fields are being sold on to new players in the industry.

These new players have the skills and commitment needed to get the remaining oil out but as they haven’t owned the field as long, when it comes to decommissioning time they are not eligible for as much tax refunds so the prospect of buying the field in the first place is not so great.

So if not sold the field would be decommissioned early.

Scotland Office minister Andrew Dunlop said the announcement was “positive news for Scotland’s oil and gas industry”.

He added: “There are very significant reserves still in the North Sea, and it is vital that the UK government does all it can to help the industry maximise these.

“We need to ensure that our tax regime helps support the industry in the most appropriate way.”