NEO Energy reduces UK investment plans due to fiscal and regulatory uncertainty

NEO Energy announced on Monday that it would slow down its investment in all of its portfolios due to the uncertainty surrounding fiscal and regulatory issues in the British oil sector.

NEO is the owner of half the Buchan Horst project in the UK North Sea. Serica Energy, Jersey Oil & Gas and NEO are the joint venture partners. They own 30% and 20% respectively.

The British government has decided to delay the assessment of environmental statements as it plans to launch a consultation for new environmental guidelines on oil and gas project.

In late July, the Labour government announced that it would raise the Energy Profits Levy from 35% to 38 % starting November 1.

It said that "against this uncertain background, NEO, and its 100%-owned HitecVision have decided to materially reduce investment activities across its entire development portfolio."

Offshore Energies UK, an industry group, said earlier on Monday that the British government’s plans to increase the windfall tax for North Sea oil producers would result in a drop of 15.77 billion pounds (12 billion pounds) in state revenue.

(source: Reuters)