The British government will slash down the tax rate on shale gas production income by half, in order to foster the "most generous" environment in the world for the resources development, said the Treasury on Friday.

The government has launched a consultation on a proposed tax regime for shale gas, including a new shale gas "pad" allowance, said Treasury in its press release.

The new allowance will reduce the tax on a portion of a company's production income from 62 percent at current rates to 30 percent. And it is expected to help encourage nearly 14 billion pounds (or 21.4 billion US dollar) of investment in 2013, hitting the highest on record.

"As well as increasing the UK's energy security, shale gas could lead to the creation of thousands of jobs and to increased tax revenues from the oil and gas industry," said the Treasury.

The robust scheme is also set to make sure that local communities benefit from hosting shale gas exploration, with operators providing at least 100,000 pounds of benefits per 'fracked' well site during the exploration phase -- and no less than one per cent of overall revenues, highlighted the government.

Chancellor of the Exchequer George Osborne said, " Shale gas is a resource with huge potential to broaden the UK's energy mix. We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits. This new tax regime, which I want to make the most generous for shale in the world, will contribute to that."

"I want Britain to be a leader of the shale gas revolution -- because it has the potential to create thousands of jobs and keep energy bills low for millions of people," said Osborne.

British government is dedicated to spur gas production to counter dwindling North Sea supply and curb reliance on energy imports. In 2012 it lifted a ban on the hydraulic fracturing drilling technique, and in June, it said shale fields in northern England are twice as large as previously estimated. Endi

Go to Forum >>0 Comment(s)