Chancellor Gordon Brown has imposed an additional tax burden on the offshore oil and gas industry. In his Pre-Budget report Brown he announced that the tax rate for upstream oil and gas producers will be increased from January 1 2006 from 40% to 50%. Brown's move provoked a predictable response from the oil and gas industry. The UK Offshore Operators Association (UKOOA), said it was shocked by the move which it estimated will take an extra £6.5 billion out of the industry over the next three years. Malcolm Webb, UKOOAs chief executive, said: "It is almost beyond comprehension that the Government has failed to grasp the vulnerability of the industry's future in the UK. His move could not come at a worse time. North Sea activity has recovered remarkably since 2002 when it was last hit by a punitive tax change. Investment, exploration and new field development in the North Sea are now reaching levels last seen around a decade ago.
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