The UK's oil industry has warned that 50,000 jobs are threatened by tax rises announced in the Budget.

The UK Offshore Operators Association (UKOOA), which represents the major oil companies, said the industry would have to pay billions of pounds more to the treasury.

This tax change will result in their investment, in pounds and dollars, being spent elsewhere

James May, UKOOA

It said that the extra payments would deter companies from exploring for oil in the North Sea.

The Chancellor, Gordon Brown, announced an extra 10% tax on North Sea oil production in his Budget last month.

And other increases, for example in corporation tax, will also affect the oil companies.

Cheaper oil

The industry criticised the tax rises immediately, but it has now put a figure on the jobs it says will be lost as a direct result.

James May, the chief executive of the UKOOA, told BBC News that the 50,000 jobs would go over the next five to eight years because investment in the North Sea would be cut.

"Our members are telling us that this tax change will result in their investment, in pounds and dollars, being spent elsewhere," he said.

He added that the North Sea was at a mature stage and the extra tax would put companies off spending on exploration there, when they could find oil more cheaply in, for example, the former Soviet Union or Africa.

Easily absorbed

Figures released by the UKOOA suggested that, using the government's assumption of an average oil price of $21.5 a barrel, tax changes could cost the oil industry an extra �7.6bn by 2010.

The organisation said that even if the oil price were to fall as low as $15 a barrel, the extra tax bill would amount to �3.7bn.

Oil analysts have said the tax rise can be easily absorbed by the big oil companies.