Britain Cuts Oil Taxes, Hands Lifeline to Battered North Sea

British finance minister George Osborne on Wednesday cut oil taxes and announced the creation of an investment allowance, an attempt to breathe new life into the battered North Sea oil and gas industry.

"It's clear to me that the fall in the oil price poses a pressing danger to the future of our North Sea industry - unless we take bold and immediate action," Osborne told parliament in his annual budget speech.

Investments in Britain's North Sea oil and gas sector, worth around 5 billion pounds ($7.33 billion) a year to the government, have stalled as record-high costs and a recent plunge in oil prices have made the mature basin one of the least attractive in the world.

Osborne announced a reduction in a supplementary tax charge to 20 from 30 percent and also unveiled a cut in the petroleum revenue tax to 35 percent from next year, down from 50 percent now.

Oil output from North Sea fields has slipped to its lowest level since production began in the mid-1970s.

North Sea investments worth around 25 billion pounds are currently unsanctioned as companies have been waiting for the government to intervene.

Reporting by Karolin Schaps and Sarah Young