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Tullow buys into North Sea fields

TULLOW Oil agreed to buy interests in 25 Dutch offshore gas fields yesterday in a move that sees the company return to its roots in the North Sea but avoid new taxes imposed by the British government.

The Dublin and London-listed company will buy the fields for €300m from Swedish utility Vattenfall Group. The move, expected to be finalised in July, will boost Tullow's output in the North Sea by 70pc to about 22,000 barrels of oil equivalent a day.

In March, Britain raised taxes for oil and gas producers in its section of the North Sea, which has been criticised by the energy industry. The increase in the tax rate to 62pc from 50pc does not affect the part of the North Sea owned by Holland.

"We see a lot of opportunity for development and exploration spend in the Dutch sector," Tullow's chief operating officer Paul McDade said. "The instability in the UK sector from a tax perspective doesn't help to sustain investment. It's been extremely punitive, the recent tax increase."

Tullow, led by chief executive Aidan Heavey, began by prospecting for oil in the North Sea but has more recently focused on Africa.

Irish Independent