Further UK North Sea fiscal reviews likely, analyst claims

Offshore staff

LONDON – Consultants GlobalData says the present UK government could legislate for proposed new tax breaks for the oil industry before Britain’s general election on May 7.

Chancellor George Osborne is due to announce his proposals during his budget speech next month.

Will Scargill, GlobalData’s upstream fiscal analyst, says that barring a significant recovery in oil prices, the next government – or coalition – will also likely move to further improve the UK fiscal regime’s attractiveness.

He added: “Any changes introduced by a [future] conservative government are likely to be tempered to an extent by its deficit-reduction targets, and it remains to be seen whether the Labour party will propose any incentives for the industry during the election campaign.

“However, with a hung parliament a strong possibility, the smaller parties’ policies may prove significant. In particular, the Scottish National Party is likely to push for substantial tax cuts, as well as uplift and exploration-relief incentives, similar to those in Norway.”


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