The UK oil and gas industry has hailed "renewed commitment" from the government after reporting record levels of investment at a time when the coalition's energy policy is facing intense scrutiny.
Trade body Oil & Gas UK, which represents offshore operators, said investment levels this year are expected to reach £13.5bn. This represents a £6bn boost on 2012, which it attributed to new tax allowances granted by Chancellor George Osborne aiding new exploration.
Oil & Gas UK's 2013 Economic Report also says the sector generates almost £40bn by producing hydrocarbons and exporting technology and expertise, while contributing around £12bn in production tax revenues.
The figures are likely to anger green campaigners, who argue the government is increasingly favouring polluting fossil fuel industries over renewable energy technologies.
Earlier this year, Friends of the Earth estimated North Sea oil and gas producers were being handed allowances worth £1bn, resulting in windfall profits despite declining production levels. According to Oil 7 Gas UK, North Sea output dropped by nearly a third between 2010 and 2012 to 1.55m boe/d and is expected to fall even further to between 1.2m and 1.4m boe/d this year.
However, the government insists developing fossil energy sources is necessary to maintain energy security and that it is committed to meeting its carbon budgets.
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