Centrica may shut field due to tax raid
BRITISH Gas parent Centrica said yesterday that it will scale back or even halt production at one of its Morecambe gas fields thanks to a massive tax hike on energy production.
Centrica said its South Morecambe field’s future was particularly uncertain, though its North Morecambe field is due to come back onstream shortly.
“Profitability of Morecambe South field can be marginal and so we expect this field to operate on a more intermittent basis in future,” a spokesman said yesterday.
The firm said gas prices were currently not high enough to justify full production at the site in the Irish Sea.
The utility had previously warned that the fields could be shut altogether unless the government rethinks its tax hike, first implemented in the March Budget, which raised taxation up to 81 per cent for certain oil and gas producers to fund a petrol duty cut.
“We will continue to monitor the market closely to make production decisions and if it makes more economic sense to buy gas for our customers in the wholesale market we would limit South field production,” the spokesman said.
Investments worth £12bn have been put at risk by the Budget measure, according to industry body Oil & Gas UK.