After Opec shock, George Osborne must slash North Sea oil taxes in Autumn Statement More than 40bn barrels of oil equivalent - almost triple total annual world oil demand at current consumption rates - have already been produced from the North Sea since the UK Continental Shelf Act was passed in 1964. However, a combination of high tax rates, ageing fields and rising production costs now threatens its long-term future should the world be entering a new era of lower prices. Estimates of the remaining reserves are between 12bn and 24bn barrels, but the commercial viability of recovering this oil is being undermined by the sudden fall in the price of crude - down by more than 30pc since June to around $70 per barrel. Although, this is not the first time that Britain's major fossil fuel producing region has endured tough lower prices in its 50-year history, it comes as it is already getting harder to attract investment from international oil companies now increasingly chasing bigger pockets of oil riches opening up in lower-cost emerging basins in Mexico and Brazil. Major international oil companies such as Royal Dutch Shell, Chevron and BP have grown more cautious about their operations off the coast of Scotland since taxes on drilling were increased three years ago. Shell said earlier this year that it would put three of its ageing North Sea assets up for sale, but it has said little since about the process. Britain's most valuable oil company will also soon begin decommissioning its iconic Brent oil and gas field north east of the Shetland Islands because it is no longer economically viable. "There is barely an oil company in Aberdeen that isn't looking at reducing its headcount at the moment," said Mike Tholen, economics director at the industry body Oil & Gas UK. The stakes are now pretty high for the Government to do something as they can't take the same rent out of the North Sea as they did when prices were high. This is now Osborne's wicked mistress. Mr Tholen believes that a significant number of wells would be running at a loss at $80 per barrel, including many older fields. Lose these fields and the entire infrastructure that keeps the region pumping would potentially go with it, warned Mr Tholen. The decision by the Organisation of Petroleum Exporting Countries (Opec) to keep pumping at its current levels and allow oil prices to keep falling will test Mr Osborne's resolve to adhere to a pledge made in 2012 to reduce taxes on drillers if the cost of a barrel of crude were to drop below $75 per barrel for a prolonged period of time. "The easing of onerous tax rates on the UK Continental Shelf is certainly at the top of the industry wishlist for fiscal review," said Tom Cartwright, North Sea tax specialist at Pinsent Masons. The supplementary charge, which adds 32pc to corporation tax, has been particularly burdensome since its increase from 20pc in 2011. Headline tax rates of 62pc or 81pc for older fields are simply far too high. The call to rein in taxes in the North Sea comes as the Government's revenue from the industry comes under pressure because more companies are following Shell's example and decommissioning older fields instead of increasinging investment to extend the lifespan of ageing acreage. Data published earlier this month showed that revenue from North Sea oil profits collected through the petroleum revenue tax (PRT) has slumped 62pc year-on-year up to the end of October, to £413m from just under £1.1bn. The PRT, which is one of the duties the Chancellor would be wise to eliminate when he makes his speech in Parliament next week, is charged at a rate of 50pc on the profits arising from individual oil fields. It is part of the Government's total income from sale of hydrocarbons, which has actually risen slightly over the past year. North Sea oil fields given development consent on or after March 1993 are exempt from PRT, but that tax continues to apply to older fields still in production, making many unprofitable amid falling prices. A trend of falling crude oil output has already taken hold this year and average production is likely to be in the region of 800,000 barrels per day (bpd), its lowest level since the early 1970s. In addition, oil companies have to invest more and drill deeper to extract the hydrocarbons which remain. According to Oil & Gas UK, the North Sea will need more than £1 trillion of new investment if all the hydrocarbons that remain untapped are to make it onto international energy markets. If that is to happen, drillers must receive more encouragement in the form of tax breaks to develop fields on the very edge of the UK Continental Shelf. One such project that is being closely watched is the potential development of the Rosebank field, one of the most challenging offshore projects anywhere in the world. Located 80 miles north west of the Shetland Islands, it is thought that 240m barrels of oil could be recovered from the field. But the US oil giant Chevron, which is investigating its viability, is dragging its feet on whether to progress. If Mr Osborne really wants to see such developments move forward and create more skilled engineering jobs then he must deliver more incentives like those that were announced in March for fields classified as ultra high pressure, high temperature. "Even before the current fall in prices, we expected investment to fall by half by 2017," said Mr Tholen. It's simply not competitive in the North Sea with the current tax regime.