The UK Treasury proposed new tax breaks for companies investing in ultra high pressure, high temperature oil and gas fields.
The new “cluster area allowances” would drop the effective tax rate for a portion of a company’s profits from 60 percent to 30 percent.
The Treasury said exploration and appraisal costs will qualify for exemption but decommissioning costs won’t.
According to the Treasury, allowance are designed to encourage oil and gas exploration and production in the North Sea.
The final level of exempt costs will be announced in the fall but is expected to be at least 62.5 percent.