Oil industry hits out at chancellor's North Sea tax

The oil industry today hit out at plans to hike corporation tax on North Sea profits, which the Chancellor claimed would raise £2 billion a year.

The supplementary tax paid on North Sea profits will increase from 20% to 32% tomorrow. On top of normal corporation tax the total levy on oil profits in the area will be 62%. Explorers BP, EnQuest, Maersk and Taqa are expected to be hit hardest.

Derek Henderson, tax partner who works on North Sea projects at Deloitte in Aberdeen, said: "This will change the economics of North Sea projects, which are already marginal. For some, it may become economically impossible to produce oil from the region." Explorers BP, EnQuest, Maersk and Taqa are expected to be hit hardest.