Despite a planned tax hike on oil producers by the British parliament, BP, Europe's second-largest oil company, is moving forward with $3.8 billion in planned investments in the North Sea, a move that is expected to extend production there through 2035.
BP (BP) is looking to extract more oil from the the Schiehallion and Loyal fields, which are estimated to still contain 450 million barrels of oil, according to the Wall Street Journal. The company made the decision after the British government raised its tax rate on oil and gas profits to 32% from 20%.
The government has said the higher tax rate will not deter exploration as higher oil prices prompt producers to seek out any new sources they can. Last month, BP said will evaluate future projects in the region as a result of the tax plan. Earlier this year, the company said it plans to spend $16 billion on projects in the region over the next five years.
Royal Dutch Shell (RDS-A), Europe's largest oil company, said it is taking the time to reassess its U.K. projects while Statoil (STO), Norway's largest oil company, halted $10 billion in planned North Sea investments due to the new tax rate.
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