THE head of Total's UK operations signalled its flagship development west of Shetland would not have been approved if the company had known in advance about the hike in the tax on North Sea profits that was imposed in the Budget last March.
"Total is working all over the world and has to choose between projects and I can tell you if that project [Laggan Tormore] would have been brought nowadays for sanction it would not be sanctioned," Philippe Guys, managing director of Total E&P UK, told industry leaders.
In a speech to a Scottish Council for Development and Industry oil and gas conference, Mr Guys complained that the tax change wiped out the benefit of allowances introduced in 2010 to encourage investment in challenging fields. These helped persuade the French giant to invest £2.5 billion in developing Laggan Tormore that year.
The associated infrastructure could help unlock the potential of vast untapped reserves west of Shetland.
"The factor which finally tipped the balance in favour of developing was the field allowance," said Mr Guys.
He added: "Needless to say in March 2011 we all feel that we have been betrayed with the Budget."
Mr Guys said Total is determined to complete Laggan Tormore on time and budget.
"We hope that the gas price will work in favour of us," he said. Industry leaders appear resigned to the increased headline rate remaining in place.
However, the chief executive of Oil & Gas UK said the industry organisation is confident of winning meaningful concessions in next month's Budget.
Oil & Gas UK wants field allowances extended to a wider range of projects.
It wants ministers to confirm that tax relief will be available for decommissioning costs in the future.
Claiming implementation of the measures could bring three billion more barrels oil and gas into development, Malcolm Webb said: "I confess I am looking forward to it [the 2012 Budget] with some anticipation."
The First Minister Alex Salmond said a trillion pounds' worth of hydrocarbons could still be extracted from the North Sea.
Senior figures from BP and Shell said the giants are committed to the UK North sea.
Trevor Garlick, regional president of BP North Sea, said: "BP has been a major part of the story in the North Sea for the last 40 years ... we certainly see a place for us as one of the major players in the basin going forward."
Graham van't Hoff, chairman of Shell UK, said: "Shell sees the UK, the North Sea and Europe as a core business area for itself and its global upstream portfolio."
He added: "Shell is a leading operator in the UK sector of the North Sea and it intends to maintain that position."
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