Carbon Brief analysis has claimed that the North Sea oil and gas sector put a dent in UK public finances last year, costing £396m. 

In 2016, the sector received £396m net of tax payments against a contribution of £381m in the previous year to the exchequer.

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This is the first year that the North Sea industry has cost the exchequer more than it has contributed.

In 2011, the industry’s contribution to the government’s coffers was more than £10bn.

Carbon Brief analysis shows that oil majors such as BP, ExxonMobil and Shell received the largest portion of the government fund mostly to decommission their old oil and gas fields.

These firms have received hundreds of millions of pounds to cover the costs of decommissioning old oil and gas fields.

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The global slump in oil prices affected the sector drastically, reducing the company profits operating in North Sea resources. Some of the largest fields located in the North Sea will also soon become depleted.

"In 2011, the industry’s contribution to the government’s coffers was more than £10bn."

Associated infrastructure for these fields requires safe decommissioning.

UK’s Oil and Gas Authority (OGA) estimates that the decommissioning process is expected to cost nearly £47bn by 2050.

The North Sea sector contributed nearly £190bn in tax revenues since the 1960s.

Having reached its height some years before, the UK North Sea oil and gas resources may no longer remain a prominent tax-paying resource to the exchequer in future.

In March last year, the Office for Budget Responsibility predicted that the oil and gas sector would be receiving a net payment of £1bn annually from UK taxpayers for the next five years starting 2016-17, reported The Guardian. Later, the figure was revised to £4.5bn over the five-year period, due to recovery in oil prices.