Tax Doubles for North Sea Energy Companies

The British government, struggling to erase its deficit, is doubling the surtax for North Sea oil and gas companies, a move that surprised an industry expecting an increase half that size, according to a Globe and Mail report. The proposed increase in the supplementary tax for North Sea energy companies is for 20 percent of income from the current 10 percent, with the change expected to cost the industry the equivalent of $13-billion over the next three years. The move affects several Canadian energy companies with North Sea assets, including Canadian Natural Resources Ltd., Nexen Inc., Petro-Canada and Talisman Energy Inc. According to the report, most of those companies said the decision will not have a major immediate impact, but that it is unsettling for any government to abruptly rewrite tax laws; adding that companies who recently bought assets will suffer the most, having paid full price. Source: Globe and Mail