Changes to the tax regime are boosting the UK’s oil and gas sector and helping to stop production declining, according to a trade body.
Global banks and lenders now see investing in the North Sea in a “new light” after the Chancellor’s tax relief for the sector, including a second tax break for oilfields in September, suggests an economist from Oil & Gas UK, which represents 290 firms in the UK.
Mike Tholen, Oil & Gas UK’s Economics Director said: “Finally, the Government has the levers to provide certainty and promote investment at all phases of a field development plan and as such, can more directly help arrest production decline.”
Today the trade body released a paper looking at the last 18 months of changes in the UK’s North Sea oil and gas tax regime.
Mr Tholen added: “Measures to promote investment in new fields, whether small, shallow-water gas or large deepwater, or in existing brown-fields, are enabling investors to give the ‘green light’ to large and small projects alike which in the short-term boosts jobs in the supply chain and in the medium-term, increases production and tax revenues.”
Nigel Hares, chief operating officer of UK exploration and production company EnQuest said tax changes have affected his company’s assets positively.
He said: “The new brown-field allowance is expected to lead to the approval of projects which will extend the lives of fields and increase reserves, employment and tax receipts. Indeed, we are actively working towards approval of the Thistle life extension project.”