BP to invest $500 million in Shetland Islands

BP to invest $500 million in Shetland IslandsUK's leading oil firm, BP has indicated that it is going ahead with its plans to invest more than $500 million in the Shetland Islands, after government announced various efforts to support oil firms in the North Sea region.

The output of gas form North Sea had fallen by about two thirds since 2000 and a tax imposed by the government has forced many oil firms to scale back. However, UK's Chancellor, George Osborne revived the industry there by annoucing several new tax breaks aimed at attracting more investments in North Sea oil and gas. He pointed out that the income from older fields will not have to pay full duty and this will make sure that the field is fully exploited.

The tax breaks is the latest in a series of steps taken by the government to boost investments following a decision to increase the supplementary charge on North Sea producers from 20 per cent to 32 per cent in 2011, which is severely criticized by the industry.

Oil & Gas UK in February now believes that the output will increase from 2014 backed by the support from the government and an increase in production by firms. BP's investment would boost capacity at its Clair field in North Sea region.