ABERDEEN, UK – Oil & Gas UK officials have met with senior representatives of the UK Treasury to learn of the government’s long-term plans for North Sea fiscal reform.
The proposals include:
- A basin-wide “investment allowance” to simplify and replace the existing system of offshore field allowances
- Measures to stimulate exploration, including financial support for seismic surveys in underexplored offshore areas, with further potential fiscal measures such as tax credits
- Reforming the fiscal treatment of infrastructure
- Potential transferability of decommissioning tax reliefs.
Oil & Gas UK CEO Malcolm Webb said: “We are encouraged to note that fiscal policy will now be framed in the context of the sector’s wider economic benefits.”
He added that all parties present endorsed the need for swift action, undertaking to identify priorities and to ensure that appropriate action is taken by the time of the UK’s annual budget in March.
Michael Tholen, Oil & Gas UK’s economics and commercial director, said he was pleased that the government had responded positively to many of the concerns raised during recent consultations. “In particular, we asked for the current, complex portfolio of different allowance types to be simplified and the proposed investment allowance will, we hope, do just that.
“This new allowance will of course need to be pitched at the right rate…There is no time to delay, we are at a critical stage in the life of the North Sea…”