Trade body Oil & Gas UK welcomed the move unveiled by UK chancellor Philip Hammond in his Budget speech to review North Sea tax rules to try and find ways of sparking new investment in maturing oil and gas assets.

Hammond said a panel of experts would examine ways of making it easier to buy and sell North Sea oil and gas assets which could keep them in production for longer.

Oil & Gas UK CEO Deirdre Michie said: “We welcome the chancellor’s response to our call to resolve the tax issues slowing down asset transfers and his recognition of the need to maximise recovery of remaining UK oil and gas reserves …

“The UK Continental Shelf continues to offer an attractive range of opportunities and it is vital that we draw in a diversity of investors to ensure these are realised.

“Enabling assets to transfer when appropriate to new owners is key to this strategy.

“As the chancellor has indicated, the tax regime has presented some significant barriers to asset trading, which we have been working on with Treasury for a number of years.

“These must be addressed as a matter of urgency.

“The current tax treatment of decommissioning makes it harder for existing owners to sell mature assets and leads to lengthy, complicated deals which slow down activity in the basin.

“Recent deals highlight the opportunities in the basin but more transactions could be achieved if this issue is resolved.

“We look forward to the formal discussion paper due on 20th of March on the case for allowing transfer of tax history between buyer and seller.

“We are also ready to play our part on the new expert panel that will consider the issues.

“We are confident that this will identify the shortcomings of the tax regime and enable a swift solution that will unblock asset deals and support maximising economic recovery.”