A new consultation that aims to support investment in “ultra high pressure, high temperature” oil and gas projects has been launched.

The Government is inviting views from a wide range of stakeholders including individuals, companies and professional bodies in a bid to encourage exploration in surrounding oil and gas areas or “clusters”.

Estimates suggest up to 21 billion barrels of oil equivalent could still be recovered from the North Sea. However the Government believes exploration and production are becoming “harder and more expensive”.

The new allowance would reduce the tax on a portion of a company’s profits from 62% to 30% at current rates.

Chancellor George Osborne said: “The UK’s oil and gas industry is one of the country’s greatest industrial success stories and this allowance will help ensure we continue to maximise the benefits from the sector for decades to come.”

A summary of responses to the consultation will be published later this year.

The Government recently also launched a separate consultation into the overall fiscal regime for the UK Continental Shelf and committed £15 million to help kick-start a new independent regulator oil and gas industry.