The UK oil and gas industries will need a stronger commitment from the Government over the future of the North Sea fields. Without it, the UK could face the loss of “critical” infrastructure, say business advisory firm, Deloitte.
According to Deloitte, the Government’s current system creates too much uncertainty around tax issues. Commitment to the North Sea industry not extending beyond the current Government is also problemmatic.
Derek Henderson, Senior Partner at Deloitte in Aberdeen said: “We would hope to see a commitment from the Chancellor towards providing a contractual guarantee to companies as to the rate of relief that would be available not just within the life of the current Government but far beyond.”
The report also highlights the next 30 years will see almost 500 platforms, 8000 wells and 4 million tonnes of steel decommissioned in the North Sea area, which is expected to cost between £25 billion – £30 billion. Deloitte’s report warns that without the right tax guarantees, the UK might not be able to maximise its reserves.
Chancellor George Osborne is set to announce the report on his 2012 Budget later this week.