Passage of U.S. tax bill could spur oil, gas activity: experts

The passage in the U.S. Congress of a new tax bill on Wednesday could lead to further investments in the oil and gas industry, experts said.

Scott Desmarais, with consulting firm McKinsey & Company, predicted that big companies in the energy sector will be the main beneficiaries of the Republican measure as it lowers the corporate tax rate.

"The cash that that frees up allows them to think about, and gives them more confidence in, some potential investments to improve and increase production, or increase productivity overall," he told local radio broadcaster Houston Public Media.

The American Petroleum Institute, an industry group, also expected the overhaul to "unleash" oil and gas activity, according to the Houston Public Media report.

If the low oil prices stay steady, it will be easier for companies to spend money to improve technological efficiency in the industry, something they have been focusing on for a while.

Desmarais said some companies are considering "bolder and more confident moves."

The U.S. Congress on Wednesday approved the tax bill which would cut the country's tax on a scale not seen in the past three decades, awaiting President Donald Trump to sign it into law.

All the 48 Democratic senators were against the bill in a vote in the Republican-controlled Senate on Tuesday. It was narrowly passed and sent to the House for a procedural vote.

Opponents to the legislation are concerned that the change will widen income inequality and swell public debt.

(ASIA PACIFIC DAILY)