Centrica to invest in £1.4bn in North Sea
31 July 2012
Centrica, the UK’s largest residential-energy supplier, will invest £1.4 billion in its Cygnus gas field in the North Sea after the Treasury unveiled tax breaks for natural gas drilling. The development, some 100 miles off the Norfolk coast, will create 4,000 jobs and supply around 5% of the nation’s energy at peak production, Centrica said in a statement.
Cygnus is Britain’s biggest southern gas basin discovery in 25 years and is expected to start producing by the end of 2015, Centrica said.
The Government last week said that new gas fields with 10-20 billion bcm in reserves located in depths of less than 30 metres will be exempt from a 32% tax on oil and gas exploration on the first £500 million of income.
Centrica said the tax break would “enhance the economics of the Cygnus project” and enable the company to proceed with the development.
“As the UK becomes increasingly dependent on imported gas, today’s announcement represents a significant boost to the UK’s long term energy security as well as creating much needed jobs,” said Sam Laidlaw, chief executive of Centrica.
The measure is expected to cost the government £20 million per year in reduced income.
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