Chancellor George Osborne said the petroleum revenue tax will be slashed from 50% to 35% to support production in older fields, while the supplementary charge for oil companies will also be cut from 30% to 20%, a chance that will be backdated to January.

The country's biggest overhaul of taxation on oil and gas exploration since 1993 means the headline rate for petroleum tax paying fields will be 67.5%.

The tax concessions come as oil prices have fallen 60% since late 2015, leading to mass sackings and exploration efforts around the world being scaled back as oil and gas companies try to control costs that had obviously risen in the $US100 per barrel environment over the past few years.

"The fall in the oil price poses a pressing danger to our North Sea industry unless we take bold and immediate action," Osborne said.

The government will fund new seismic surveys in underexplored areas of the UK continental shelf via a $A50 million investment in the newly formed Oil and Gas Authority to commission seismic and other surveys.

The UK will also invest almost $A130 million in energy research.

Peak body Oil & Gas UK, which had been calling for the tax cuts, welcomed the "decisive move" to restructure the North Sea tax regime to promote investment in the nation's vital and considerable remaining oil and gas resource.

"The UK will continue to rely on oil and gas for the majority of its energy supply for many decades to come so this action, which will help to maximise recovery of that resource, is both sensible and far-sighted. These tax reforms will help to sustain an industry which supports hundreds of thousands of British jobs both in its domestic production activity and in the export of oilfield goods and services," CEO Malcolm Webb said.

"Today's announcement lays the foundations for the regeneration of the UK North Sea. The industry itself must now build on this by delivering the cost and efficiency improvements required to secure its competitiveness."

He said the measures would allow the UK to compete internationally for investment.

Oil & Gas UK estimates that, in the near-term alone, these measures could prompt an additional $A8 billion of capital investment, enabling the development of 500 million barrels of oil equivalent worth almost $A45 billion.

Since 1964, the North Sea has yielded nearly 42 billion barrels of oil equivalent with another 15-17Bboe still left for viable extraction, according to various industry estimates.

The low oil price is severely testing that viability at the moment with many fields, especially those West of Shetland not viable below a $US60/bbl oil price.

North Sea oil production peaked in 1999.

The Cameron coalition government wants production to rise by production by 15% by the end of the decade.

Australian oil production has also long since peaked, but it seems unlikely that the Abbott government's second budget, described by the treasurer as likely to be dull and boring, will include any significant changes for the Australian oil patch.