OIL and gas firms have increased the amount they plan to invest in the UK North Sea by 30% to £31 billion over the past year despite the hike in taxes in the 2011 Budget.
Research by Oil & Gas UK shows firms expect to ramp up spending over the next four years to cash in on booming global demand for fuel.
In its latest annual activity survey, the industry group found members expect to invest £11.5bn on developing new fields and extending existing developments this year.
This is a record total in cash terms and up 40% on the £8.5bn invested last year.
Firms expect to invest a further £19.5bn from 2013 to 2015 on projects that they have already approved.
The results reflect the fact that a series of bumper projects have been approved since the Chancellor increased the tax rate payable on North Sea profits by 12 percentage points in the Budget in March last year.
These include the £4.5bn Clair Ridge development west of Shetland, which BP and Shell are backing.
The increase in oil prices in recent months has encouraged firms to take risks off Scotland, where advances in technology are transforming the economics of some fields.
The price rise appears to have offset any concern about increased taxes.
When last year's activity survey was completed firms had sanctioned £24bn investment, including £8bn expected throughout 2011.
Oil & Gas UK said planned spending is at the top end of the estimates that it set following the Budget.
The organisation predicted the tax increase would lead to a big drop in investment based on past experience.
However, firms expect to increase activity this year.
Oil and gas firms are planning to drill 25 exploration wells in 2012 compared with 15 last year.
However, Oil & Gas UK said an 18% fall in average daily production, to 1.8 million barrels oil equivalent last year, was partly due to the tax increase. It noted that 50% fewer exploration wells were drilled last year than in 2010.
Malcolm Webb, chief executive of Oil & Gas UK, claimed business confidence remained sluggish, despite an average oil price of $111 per barrel.
He said: "It would be a mistake to take the current major project activity as a sign of long-term confidence across the industry.
"This year and next will see high investment on a few large projects which were commercially committed before last year's Budget."
The costs of operating in the North Sea have increased markedly.
Oil & Gas UK said investment could tail off sharply after 2015 unless the Chancellor of the Exchequer George Osborne encourages firms to invest in smaller fields.
The organisation hopes Mr Osborne will include tax breaks to encourage investment in marginal fields in his Budget next month.
It believes these could encourage firms to develop 1.3 billion barrels of oil and gas in what it calls fiscally stranded reserves.
A further 1.7 billion barrels could be unlocked with the appropriate support for decommissioning.
"At no additional cost to the Exchequer, the Chancellor could boost UK production with benefits for UK investment, jobs, the balance of trade and energy security," said Mr Webb.
Separately, Parkmead Group, the independent run by Tom Cross, who founded Dana Petroleum, announced it had completed the acquisition of 20% stakes in each of four blocks in the Southern North Sea from Sorgenia E&P (UK).
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