The North Sea Tax that hit some wells in the region with 80% tax earlier this year could benefit the sector. This is the view of Nigel Hares, COO at UK oil firm Enquest, who suggested that less competition in the region could pan out well for some companies.

Although admitting that the Treasury’s “surprise in the Budget” in March “obviously hurts” companies like his, Mr Hares said: “With a lot of review of opportunities, a look at the competitive situation, and a lot of engagement with the UK government – I’ve personally been involved in that – I’m absolutely convinced it creates opportunities, lowers the competition to an extent.”

He also told the audience at the FirstEnergy Global Energy Conference in London yesterday that he expected “modifications to the tax regime, particularly to stimulate new field development… that has to happen.”

However, he warned that a drop in investment in the region was on its way, because companies often commit to spend in the North Sea several years in advance. The oil man said: “What happened last time the tax was increased, capex continued on its planned trajectory because commitments had been made. But after two years, capex dropped. I fully expect to see the same sort of thing now.”