Investors will be listening intently as George Osborne’s budget speech gets to North Sea oil on Wednesday.
Whilst the chancellor has claimed there will be no gimmicks or giveaways, it is hoped a lifeline will be thrown to the ailing North Sea oil and gas industry.
Osborne is already expected to write into the budget a previously proposed new investment allowance – a tax break intended to boost the region’s appeal.
But, there are also hopes for a cut to the headline rate of tax for squeezed oil companies.
Even before the price of crude collapsed the North Sea struggled to compete with other far flung oil and gas provinces around the world, due partly to Britain’s comparatively tight fiscal terms.
With tax rates of up to 80% for some fields the somewhat onerous tax regime has been prohibitive for oil industry investment.
This has been exacerbated by falling oil prices, which have caused oil firm’s to slash capital investments.
Offshore industry group Oil & Gas UK has called on Osborne to save the ailing North Sea, which it claims is at risk of wasting valuable national natural resources.
If investment continues to dry up and key infrastructure is closed down, vast volumes of hydrocarbons will be left in the ground, the lobbyist warned recently.
About 80% of potentially accessible crude oil could be lost, according to an Oil & Gas UK report last month.
Malcolm Webb, the Oil & Gas UK chief executive, at that time said critical North Sea infrastructure will disappear without sustained investment in new and existing fields.