Chancellor George Osborne has announced a tax allowance that will support investment in older 'brown field' North Sea oil and gas fields, the BBC reports.

Industry body Oil and Gas UK has estimated in the past that tax breaks could stimulate investment by up to £2bn.

And the chancellor said the changes would give companies an incentive to "get the most out of" older fields.

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The brown field allowance will shield up to £250m of income in qualifying brown field projects, or £500m for projects in fields paying Petroleum Revenue Tax, from the 32% supplementary charge rate.

The chancellor increased this charge in his 2011 budget to fund a fuel duty cut after a surge in global oil prices.

The level of relief available to an individual project will depend on its size and unit costs.

Speaking about the new allowance, the chancellor said: "This government has signalled its absolute determination to get more investment in the North Sea, a huge national asset."

(NE)