1 Introduction
1. North Sea oil and gas is one of Scotland's most
valuable natural resources; one that gives rise to a significant
number of jobs and opportunities in the oil and gas sector and
its associated support services and supply chain. The oil and
gas industry in the UK has helped to foster a "centre of
global engineering excellence" and now employs over 100,000
people in Scotland, generating export earnings of £4 billion
per annum.[1] Continued
investment and exploration are important in order to safeguard
these jobs.
2. Since 2002 there have been three major changes
in the North Sea fiscal regime (see paragraph 7). In May last
year we announced an inquiry into the effects of tax increases
on the oil industry. We are grateful to all those who responded
to our call for evidence and particularly to those who gave evidence
at the three public hearings we held on this issue. Details of
all those who gave evidence are included at the end of this Report
(see page 14). Our inquiry has sought to examine the effect of
tax increases and whether, as a consequence of the changes to
the fiscal regime, some potential investments have become uneconomic.
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