UK Tax Increase Hurts South Morecambe Profitability

- UK Tax Increase Hurts South Morecambe Profitability

Thursday, June 02, 2011
Rigzone Staff
by Karen Boman

Centrica will operate its South Morecambe gas field intermittently in the future as the increase in UK Supplementary Corporation Tax means the field's profitability may be marginal.

The tax increase means the South Morecambe field will be taxed at 81 percent. Decisions on when to run the field are made on a commercial basis, taking into account market factors, operating costs and earnings, a company spokesperson said.

"We will continue to monitor the market closely to make production decisions and if it makes more economic sense to buy gas for our customers in the wholesale market we would limit South field production."

Planned maintenance at the field has been completed and the field has been operationally available since May 28, a company spokesperson said.

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Centrica: Tax Burden to Impact Production at Morecambe South

- Centrica: Tax Burden to Impact Production at Morecambe South

Thursday, June 02, 2011
Dow Jones Newswires
by Sarah Kent

Planned maintenance on one of the U.K.'s largest gas reservoirs has been completed, but a recent increase in taxes levied on companies operating offshore the U.K. could impact its return to full production, reservoir operator Centrica said in a statement.

While the company is preparing to restart production at its North Morecambe gas field, it said it planned to run its Morecambe South field on a "more intermittent basis" in the future as the increased tax burden meant it had become marginal economically.

"We will continue to monitor the market closely to make production decisions and if it makes more economic sense to buy gas for our customers in the wholesale market we would limit South field production," a Centrica spokesman said.

Copyright (c) 2011 Dow Jones & Company, Inc.

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