Oil industry confidence drops

The gas and oil industry has suffered a drop in confidence, according to sector body Oil and Gas UK.

Publishing its latest quarterly index, the organisation highlights that the index has reached its greatest low since the third quarter of 2009, falling to 51 - and claims that the recent tax hike levied on North Sea oil is in part to blame.

In March, chancellor George Osborne increased the supplementary tax on the region's production to 32 per cent - a rise of 12 percentage points from the previous 20 per cent.

Some 50 per cent of respondents within the gas and oil sector cited the soaring tax as the main reason for their drop in confidence.

"This quarter we have seen activity levels, investment and business confidence show the largest falls in confidence," the organisation comments in its report.

Last month, industry expert Professor Kemp spoke to Oil and Gas IQ to discuss the potential impact of the tax on the North Sea oil sector.

He warned that it could cause a negative impact on investments and cash flow for mature field operators.