Centrica mothballs Morecambe Bay gas field

ENERGY giant Centrica has carried out its threat to mothball the South Morecambe gas field.

The group, which owns British Gas, warned last month that it was pondering the move because of a big increase in offshore drilling tax, which went up from 20 per cent to 32 per cent in George Osborne’s first budget.

However, Centrica said today that no jobs would be lost and added that the field would be brought back into operation once the wholesale gas price had risen sufficiently to make production viable.

The company has meanwhile reopened the Morecambe Bay North field after maintenance, with the Rivers field also expected to reopen.

Centrica said the tax rise meant it was paying 81 per cent tax on the South Morecambe field.

A company spokesman added:

“At this level of tax, profitability of Morecambe South field can be marginal and so we expect this field to operate on a more intermittent basis in future.”

Morecambe Bay’s output accounts for about 6 per cent of the UK’s demand for gas.